Donald Trump has sharpened his attacks on India’s trade policy. He’s dubbed the country a “tariff king” and made it a “big abuser” of trade relations. The U.S. president’s comments come at a time when negotiations are still ongoing. The ultimate aim is to shrink the massive $45 billion trade deficit the United States has with India. The U.S. has created hard deadline of August 1 for India to conclude a trade deal. If India does not meet this deadline, they will be subject to tariffs of up to 25%.
In this regard, over the past few months, India has blinked first by reducing tariffs on specific products almost unilaterally, such as Bourbon whiskey and motorcycles. That’s not good enough for Trump, who’s taken to Twitter to voice his displeasure for India’s still-high tariffs.
“India has been a good friend, but India has charged basically more tariffs than almost any other country.” – Donald Trump
The matter gets even trickier, considering that just a few weeks ago, the United States emerged as India’s top trading partner. Their bilateral trade in 2024 increased to a remarkable $190 billion. Together, Trump and Indian Prime Minister Narendra Modi recently created an ambitious target. They plan to at least double the annual number of new dwellings, to $500 billion.
The U.S. government has been aggressively advocating for improved access to India’s agricultural sector. They view it as the last great frontier uncharted market big thing out there. India has historically protected its agriculture sector, citing reasons related to food security and the welfare of millions of small farmers. Piyush Goyal, India’s Commerce and Industry Minister, acknowledged the protectionist nature of India’s trade policy during an interview, stating it has been “premised on strongly protecting their domestic market.”
Even with these hurdles, Goyal is hopeful that an agreement will be struck with the U.S. in the near future. As negotiations enter a contentious final push, he underscored that in any agreement, India’s interests – specifically those of its farmers – will be “well protected.”
“We’ve always had very constructive discussions with them.” – Jamieson Greer, U.S. Trade Representative
Most spectacularly, in April Trump declared he was going to impose tariffs of up to 27% on Indian goods, and then postponed those plans. The approaching August deadline adds even more pressure on both nations to come to a trade agreement that benefits both parties.
India’s strong stance in protecting its agricultural interests reflects a long-standing commitment to safeguard its farmers’ livelihoods. Goyal echoed this commitment as he walked the tightrope of competing public relations, domestic political pressure, and international trade negotiations.