With the August 1 deadline around the corner and no interim deal in sight, President Donald Trump has hinted that the US may impose a 20–25% tariff on imports from India. Speaking to reporters, Trump said the final tariff rate is yet to be decided as the two countries continue negotiations on a trade deal ahead of the deadline.

“India has been a good friend, but India has charged basically more tariffs than almost any other country,” Trump said aboard Air Force One as he returned to Washington from a five-day visit to Scotland. “You just can’t do that.”

Indian government sources had earlier said that New Delhi is not in a hurry to finalise the deal. “We are in negotiations with the US government for the Bilateral Trade Agreement (BTA), but if an interim agreement is reached, it is well and good,” a senior government official told The New Indian Express.

US Trade Representative Jamieson Greer said on Monday that the US needed more time to assess India’s willingness to further open its markets to American exports.

A US trade delegation is scheduled to visit India on August 25 for further talks on the BTA, the first tranche of which both sides had agreed to conclude by September–October this year.

In April, Trump had announced a 26% reciprocal tariff on Indian goods exported to the US, but put it on hold pending trade negotiations. Currently, Indian goods entering the US attract a 10% levy, except for a few sectors where rates differ. Steel and aluminium, for instance, face a 50% tariff.

Tariffs on agricultural products—particularly genetically modified (GM) crops—and dairy items remain key points of contention between the two countries. A senior government official had earlier told TNIE that India is firm on its position against importing GM crops from the US.

It is to be noted that in the India–UK trade deal, several sensitive items such as dairy and farm products were excluded from the scope of the agreement.