US President Donald Trump said a trade deal with India has yet to be finalised and warned of possible higher tariffs ahead of an August 1 deadline to seal an agreement.
His comments followed a Reuters report that India was preparing to accept higher tariffs of 20%-25% on its exports to the US in the absence of a trade deal, as it holds off on offering fresh concessions ahead of Friday's deadline.
"India has been a good friend, but India has charged more tariffs, almost more than any other country," Trump told reporters aboard Air Force One on Tuesday, adding that it would come to an end.
Asked about the Reuters report, Trump said a trade deal had not been finalised and India could face steeper tariffs.
India plans to resume broader trade talks with the US in mid-August when a US delegation is due to visit, hoping to seal a comprehensive bilateral trade agreement by October, Indian officials said.
"Talks are progressing well," an official said, adding Trump could issue a tariff order in a "worst-case scenario". The official declined to be identified without authorisation to speak to the media.
"But, we assume it would be a temporary measure, considering the five rounds of trade talks that have taken place. A deal will soon be worked out,” the official said.
Trump also reiterated his claim that he helped broker a ceasefire to a conflict between India and Pakistan earlier this year, saying both sides accepted his request.
"That was great," he said, describing his friendship with Prime Minister Narendra Modi. India disputes Trump's claims that he brokered the ceasefire.
Analysts say Trump's remarks on the Pakistan-India conflict have cast a shadow on trade negotiations.
On Monday, Trump said most partners that do not negotiate separate trade deals would soon face tariffs of 15% to 20% on their exports to the United States, well above the broad 10% tariff he imposed in April. His administration will notify some 200 countries soon of their new "world tariff" rate.
US stocks closed lower on Tuesday, with the Dow dropping nearly half a percent and the S&P 500 and Nasdaq each shedding roughly a third of a percent.
US Trade Representative Jamieson Greer told CNBC the India talks require more time, noting Trump wants good deals, not fast ones.
India has shown "strong interest in opening portions of its market," though its trade policy had long focused on protecting domestic interests, Greer said.
Piyush Goyal, India's trade minister, told Reuters last week India was making "fantastic" progress in US trade talks.
Indian officials said New Delhi had offered tariff cuts on a wide range of goods and was working to ease non-tariff barriers.
However, agriculture and dairy remain “no-go” areas, with India unwilling to allow US imports of genetically modified soybean or corn, or to open its dairy sector.
Total bilateral goods trade reached about $129 billion in 2024, with India posting a surplus of nearly $46 billion.
Officials said India was calibrating its strategy amid broader US tariff threats targeting BRICS nations, including India, over issues such as de-dollarisation and Russian oil purchases.
"We remain hopeful of securing a deal that gives Indian exporters preferential access compared to our peers," a second Indian government official said, speaking on condition of anonymity.
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