"India is facing a higher tariff rate compared to most other nations, according to Trump, who suggests a potential 25% duty increase."
The United States has imposed a 25% tariff on Indian goods, effective from August 1, 2025, as part of President Donald Trump's broader trade strategy called the "Liberation Day" trade plan. This tariff targets Indian exports to the US, projected to be around $87 billion in 2024, particularly labor-intensive sectors such as apparel, medicines, gems and jewelry, and petrochemical products.
The US has cited high Indian tariffs and stringent non-monetary trade barriers as the main reasons for this move. The US-India trade imbalance currently favors India by $45.7 billion, a key point in the US imposing these tariffs.
India's response to this development is still under negotiation, with both countries working towards a trade deal. However, no interim agreement has been finalized as of late July 2025. The tariffs have heightened tensions, with India being the latest country to be targeted under Trump's tariff policy.
Union Minister for Commerce, Piyush Goyal, emphasized that ongoing discussions with the US are progressing well. Foreign Secretary Vikram Misri also confirmed ongoing discussions for a Bilateral Trade Agreement (BTA) between India and the US. Misri further emphasized the ongoing contacts with partners in the US during Prime Minister Narendra Modi's visit to the UK last week.
Meanwhile, Trump claimed credit for brokering the ceasefire agreement between India and Pakistan. However, India reportedly refuted Trump's claims, stating that it was Pakistan's DGMO who contacted them to request an end to hostilities. Trump praised India's leadership under Prime Minister Modi for its role in regional stability.
These developments came during a press conference following the signing of the India-UK Free Trade Agreement. Trump mentioned that all this would come to an end as he is now "in charge." Piyush Goyal stated that India today negotiates from a position of strength and confidence.
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- The tariff imposed by the United States on Indian goods could potentially impact various sectors of the Indian economy, including finance, business, and the general-news, as it targets exports worth around $87 billion in 2024.
- The Finance Ministry in India is likely to closely monitor the market implications of this tariff, considering its impact on labor-intensive sectors such as apparel, medicines, gems and jewelry, and petrochemical products.
- The Defi (Decentralized Finance) community might also be interested in this development, as changes in trade policies can create opportunities or challenges for businesses adopting new financial technologies.
- The ongoing trade negotiations between the US and India are not just about tariffs anymore; they extend into broader discussions about politics and international relations, as reflected in the talks about a Bilateral Trade Agreement (BTA) and Trump's involvement in the India-Pakistan conflict.
