US India Trade Tensions Escalate as Trump Threatens Reciprocal Tariffs and Potential 10% BRICS Duty by August 2025
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US India Trade Tensions Escalate as Trump Threatens Reciprocal Tariffs and Potential 10% BRICS Duty by August 2025
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Big developments are underway in India-US trade relations as President Donald Trump intensifies his global tariff campaign. On July 9, Trump sent out formal tariff warning letters to multiple countries, but notably, India was not among those targeted for immediate action. According to American Bazaar, Trump’s administration has taken a more measured approach toward India compared to other nations, such as Brazil, which received a steep 50% tariff on exports to the US. The White House emphasized that while tariffs loom, negotiation remains open, and tariff rates could be adjusted based on the willingness of countries to make trade concessions.
Meanwhile, Time reports that India faces the prospect of a 27% “reciprocal” tariff rate on its exports if a deal isn’t reached before the revised deadline of August 1, 2025. These reciprocal tariffs would be in addition to specific duties—such as a 25% tariff on cars and auto parts and a 50% duty on steel and aluminium imports—already in place for other nations. Trump has also warned of a blanket 10% additional tariff on BRICS countries, which directly includes India, accusing the bloc of undermining the US dollar. The president's July 6 statement left little room for exceptions and signaled his willingness to escalate further if he perceives anti-American economic alignment via BRICS.
Despite the rising pressure, India’s government is holding its ground. The Economic Times outlines that Indian and US negotiators are locked in tense discussions, especially around agricultural, dairy, and auto market access. Commerce Minister Piyush Goyal has reiterated that India will not agree to a trade deal under the pressure of a deadline, making it clear that protecting domestic farmers and dairy producers is a priority, even as the US pushes for more access for its products. India has also officially reserved the right to impose retaliatory duties against the US under WTO rules, after Washington hit Indian auto parts and steel with 25% tariffs.
While negotiations at the table continue in Washington, India is asserting itself at the WTO, challenging US trade actions and signaling a willingness to push back. According to the New Indian Express, Indian negotiators are scheduled for another visit to Washington in hopes of bridging key differences before the August deadline. If no deal is reached, sources say India may simply refuse to ink the agreement and instead accept the reciprocal US tariffs, underlining that the government’s strategy is to safeguard long-term national interests rather than yield to external pressure.
For Indian exporters, this is a critical window. According to India Briefing, despite the uncertainty, India’s merchandise exports to the US saw a strong 27% year-on-year growth in April 2025, as importers rushed to beat impending tariff hikes. The Confederation of Indian Textile Industry noted that textile and apparel exports to the US are up more than 13% so far this year, underscoring America’s role as India’s top export market—though sector leaders warn that continued uncertainty could soon impact order flows.
As we track these rapidly evolving negotiations and tariff actions, listeners should remain alert. The situation could shift by August 1, and both sides are under mounting political and economic pressure to reach an agreement.
Thanks for tuning in to India Tariff News and Tracker. Don’t forget to subscribe for all the latest updates on US-India trade.
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