Dim Prospects for India-US deal to beat reciprocal tariffs on Aug 1
An India-US mini trade deal seems unlikely before the August 1 reciprocal tariff deadline as the latest round of trade negotiations in Washington last week did not result in a breakthrough. Another round of discussions is scheduled in the second half of August when a team of US negotiators arrive here, sources said.
New Delhi will have to brace itself for imposition of reciprocal tariffs by the US on August 1 or hope for a further postponement of the tariff deadline, which, US officials have indicated, may not happen.
“The Indian team of negotiators is just back from Washington after week-long talks but no breakthrough on an interim or mini-deal was made. US officials are now likely to visit India in the second half of August,” a source tracking the matter told businessline.
On Sunday, US Commerce Secretary Howard Lutnick called August 1 a “hard deadline,” and said no extensions will be granted. “…nothing stops countries from talking to us after August 1st,” he added.
Focus may now shift on securing the first tranche of the proposed India-US bilateral trade agreement (BTA) by Fall 2025 (September-October), as initially decided. New Delhi wants the deal to be “mutually beneficial”, with its exporters, too, gaining greater market access in the US.
On April 2, Trump announced reciprocal tariffs on most trade partners with which US had a trade deficit, including a 26 per cent tariff on India. The reciprocal tariffs were postponed (except for a 10 per cent baseline tariff) till July 9 and then further pushed till August 1 as the US was unable to strike trade deals with most countries.
New Delhi is not sure whether Trump will send it a tariff letter, in line with those sent to many other countries with which deals were not secured, specifying the tariffs that would be levied on their goods from August 1. In some cases the tariffs mentioned in the letters were different from the reciprocal tariffs initially announced.
Published on July 21, 2025
