US India Trade Tensions Escalate: Trump Sets August 1 Deadline for Tariff Deal Modeled on Indonesia Agreement
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US India Trade Tensions Escalate: Trump Sets August 1 Deadline for Tariff Deal Modeled on Indonesia Agreement
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Trump has made clear this Indonesia template could be replicated with India. He said, “We're going to have access into India. You have to understand, we had no access to any of these countries. Our people couldn't go in, and now we're getting access because of what we're doing with the tariffs.” The president emphasized that if a deal isn’t hammered out by August 1, unspecified "arbitrary tariffs" would be imposed, as reported by NDTV and Times of India.
India has yet to receive a formal tariff ultimatum letter, a move many interpret as a sign that negotiations are ongoing and perhaps nearing agreement. While Trump has threatened hefty tariffs—ranging from 10 percent on all BRICS countries, including India, to 50 percent on Brazilian goods, and even a punitive 100 percent tariff for nations still buying Russian oil (India being a leading purchaser)—the focus for India right now remains on averting high, one-sided tariffs and maintaining access to its largest export market. Politico notes that whatever deal is announced before the deadline is expected to be just the first phase, with a broader and more robust pact set for later in the year.
It’s important to note that earlier this year the US imposed a 27 percent reciprocal tariff on India, prompting India to offer tariff reductions on motorcycles and whiskey and to open segments of its market to US goods, as detailed in Wikipedia’s summary of 2025 tariff events. Indian negotiators are pushing for a more balanced arrangement, wary of exposing sensitive agricultural and dairy sectors to duty-free competition from the US.
According to analysis from Times of India and SBI Research, India is better positioned today to weather unfavorable deals by diversifying its export markets. However, Indian officials remain focused on sealing a deal that preserves access for its high-value exports and averts escalation in this rapidly shifting tariff climate.
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