India, US push deadline to strike trade deal to 31 July
Unlike 14 countries that have already received formal letters—and others may soon get them—from President Trump outlining revised tariff schedules after a 90-day pause, India will not receive any such communication, the people said, speaking on the condition of anonymity.
The terms of the negotiation with India approved by the US Trade Representative (USTR) await Trump’s final sign-off. The Indian side is treading cautiously and not rushing into a pact like the one the US concluded with Vietnam.
“We are seeking a fair and respectable agreement by sticking to the red lines drawn on agriculture and dairy,” said the first of the two people cited above.
The main sticking points include dairy, agriculture, digital trade, genetically modified (GM) seeds, and medical services. The US is pushing for more access, while India aims to protect its key sectors.
Queries emailed to the Indian commerce ministry, the US Embassy in New Delhi, the USTR, and the US Commerce Department remained unanswered.
With 24 hours left for the 9 July deadline for reciprocal tariffs, the White House is expected to issue more letters informing countries about tariff rates. But India is not on the list.
“We’re close to making a deal with India,” Trump had said on Monday in Washington.
Steep tariffs
According to the executive order issued by President Trump on Monday, the new reciprocal tariffs and rates will take effect from 1 August for the following countries: Japan (25%), South Korea (25%), South Africa (30%), Kazakhstan (25%), Laos (40%), Malaysia (25%), Myanmar (40%), Tunisia (25%), Bosnia and Herzegovina (30%), Indonesia (32%), Bangladesh (35%), Serbia (35%), Cambodia (36%), and Thailand (36%).
The highest tariffs—40%—have been imposed on Laos and Myanmar. Thailand will face a 36% duty, unchanged from the rate announced on 2 April, while Cambodia’s rate has been revised down from 49%. Bangladesh’s duty has been lowered from 37%, and Indonesia’s 32% tariff remains unchanged. Malaysia’s tariff has been raised by one percentage point to 25%, while Japan and South Korea will each face a 25% duty.
“Revised tariff letters for more countries will be issued in the coming days and weeks,” White House Press Secretary Karoline Leavitt said on Monday.
Until the deal is announced, the tariff on India will remain unchanged at 26%—comprising a 10% baseline duty and an additional 16%, according to the second person quoted earlier. “We are hopeful of finalising the trade deal by next week, or at the latest, before 31 July.”
“We want a deal, not a steal,” the person added, referring to Vietnam’s agreement with the US, which still carries a 20% duty despite the two countries having a free-trade agreement for over a decade.
However, trade experts caution that the emerging deal may reflect pressure rather than genuine reciprocity as Trump demands concessions without offering any, turning negotiations into one-sided pressure pacts.
“What we are seeing are deals under duress, not based on true reciprocity,” said Ajay Srivastava, co-founder of the Global Trade Research Initiative (GTRI).
“President Trump’s trade strategy circumvents traditional FTAs. It demands tariff cuts and purchase commitments from partner countries without offering matching concessions from the US, effectively turning negotiations into one-sided pressure pacts,” he said.
“Even signed deals don’t guarantee long-term certainty,” he added. “The recent 10% tariff threat against BRICS nations over so-called anti-American policies shows how volatile and politically driven US trade diplomacy has become.”
Vietnam, UK model
India’s pact is likely to follow the US model adopted in agreements with the UK and, more recently, Vietnam, trade experts said.
In its trade deal with the UK, the US did not remove the 10% baseline duty that applies to all countries. In Vietnam’s case, the total tariff was lowered from 46% to 20%, including the 10% baseline duty imposed under Trump’s reciprocal tariff framework. The US-Vietnam deal also introduced a 40% tariff on transhipments through Vietnam, aimed at curbing Chinese goods being rerouted via Vietnamese facilities.
