Trump says close to sealing deal, gives India three-week breather from tariffs

President Donald Trump has said the US was close to “making a trade deal” with India, the announcement coming as he issued letters imposing 25 per cent to 45 per cent tariff on 14 countries, including ally Japan.

As the tariff deadline has also been extended from July 9 to August 1, India now has a three-week breather to finalise the terms of the bilateral trade agreement with the US. Trump had announced 26 per cent tariffs on Indian imports on April 2, but held off its implementation for 90 days.

India was not included in the list of countries that received tariff letters from the Trump administration on Monday. The countries that got these letters were Bangladesh, Bosnia and Herzegovina, Cambodia, Indonesia, Japan, Myanmar, Kazakhstan, Laos, Malaysia, Serbia, South Africa, South Korea, Thailand and Tunisia.

Questioned by the media in Washington DC, Trump said, “We are close to making a deal with India. Letters have been sent to those with whom there has been no progress.”

India and the US, however, have unresolved issues, with New Delhi drawing “red lines” on giving duty concessions in agriculture and dairy sectors. Agriculture and allied sectors contribute 16 per cent to India’s $3.9 trillion economy and sustain nearly half of the country’s 1.4 billion population. India has not agreed to open agriculture and dairy to European countries and had in the past walked off a deal with New Zealand over the same issue.

The US is demanding tariff concessions on automobiles, electric vehicles, petrochemicals, wines, dairy and farm goods. India has been seeking lower duties on labour-intensive exports like textiles, apparel, gems and jewellery, leather, chemicals, shrimp and horticulture.

The two countries had started negotiations on a full-fledged bilateral trade agreement in February. While that is likely to take shape by September–October this year, the focus for now is on securing an interim pact to prevent immediate tariff pain and stabilise relations.

Even amid rising trade friction, the US remains India’s top trading partner. In 2024–25, the two-way trade reached $131.84 billion, with India enjoying a surplus of $41.18 billion. The US has also invested over $70 billion in India since 2000, with major American firms active in sectors like IT, manufacturing and services. The two sides have set a target of achieving $500 billion trade by 2030.

India