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India in talks with US for tariffs below 20 pc in interim deal

As part of its current talks, India hopes the baseline tariff would be negotiated to fall below 20 per cent compared with the 26 per cent initially proposed.

News Arena Network - New Delhi - UPDATED: July 12, 2025, 05:56 PM - 2 min read

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With India in talks with the US for an interim trade deal before a broader agreement this fall, tariffs on Indian goods may fall below 20 per cent, say sources familiar with the matter.


A team of Indian negotiators is expected to visit Washington soon for another round of talks. India doesn’t expect to receive a tariff demand letter in this period unlike other nations this week, sources have stated.


After announcing sweeping tariffs in his ‘Liberation Day’ address on April 2, US President Donald Trump hiked tariff duties on Indian goods by 26 per cent and set July 9 as the deadline for a mini-trade deal to be finalised before the new tariffs would be levied. Until then, India continues to pay the 10 per cent baseline tariff, which is the current global baseline minimum levy for nearly all US trading partners.

 

Also Read: Past the deadline, Indian team to visit US for trade talks


As part of its current talks, India hopes the baseline tariff would be negotiated to fall below 20 per cent compared with the 26 per cent initially proposed. It also hopes roadblocks in the negotiations, such as increased duties on agricultural and dairy imports, as well as import of GMO-tagged products, would be smoothened out.


While it remains unclear when the interim agreement would be arrived at, reports say lowered tariff rates will certainly put India in a favourable position against its peers in South Asia.


Trump, meanwhile, has been regularly announcing increased tariffs on various nations, including BRICS members. He sent new trade letters to 14 nations this week that stated revised tariffs as high as 50 per cent and an extended trade deal-finalisation deadline of August 1. 


So far, the US has settled negotiations with Vietnam, which would pay 20 per cent in import duties, and the UK. Vietnam hopes to bring the rate down even more. Tariff rates for other Asian nations range from 20 per cent (for Vietnam and Philippines) to 40 per cent (for Laos and Myanmar).


On Thursday, Trump told NBC News he’s eyeing blanket tariffs of 15 per cent to 20 per cent on most trading partners who haven’t been informed yet of their rates. 


India was among the first nations to approach the White House for trade talks this year, but contentious issues have emerged since then. 


Although Trump had said a deal with India would be announced “very soon”, he has also threatened additional tariffs over the country’s participation in the BRICS summit. 


India has maintained it is open to discussions and negotiations, but drawn lines when it comes to key issues including Washington’s demand that India open its market to genetically modified crops, which New Delhi rejects, citing risks to its farmers.

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