Trade negotiations between India and the US continue, regardless of the imposed 50% tariff increase.
The sixth round of India-US bilateral trade agreement negotiations, scheduled for August 25, has been postponed following the United States' imposition of a 50% tariff on Indian exports, effective from August 27, 2025. This tariff increase, announced by US President Donald Trump last week, has significantly strained negotiations, as the US demands tariff reductions on Indian agricultural and dairy imports, which India has firmly rejected.
The US initially imposed a 25% tariff on Indian exports on August 7, followed by an additional 25% tariff scheduled for August 27, cumulatively raising the duty on Indian goods to one of the highest levels faced by any American trading partner. The tariffs have put sectors like Indian pharmaceutical exports at risk amid tariff hikes and intellectual property disputes, reflecting increased tension between the two nations.
India stands firm against lowering tariffs on agriculture and dairy products and refuses to accept imports containing genetically modified foods, citing the protection of its farmers, cattle-rearers, and fishermen as a priority. Prime Minister Modi emphasized this concern in his Independence Day address.
The postponement of talks and the cancellation of the US trade delegation's August visit highlight the current state of the negotiations. The Department of Commerce is currently engaging with all stakeholders to assess the situation regarding the tariffs on India's exports to the US.
While the tariffs have disrupted ongoing trade negotiations, delaying any bilateral trade agreement progress, both countries hope to continue talks. The external affairs ministry has condemned the comments made by Pakistani army chief Field Marshal Asim Munir, while the foreign secretary mentioned that India's relations with the US are multi-dimensional.
It is worth noting that goods trade between the US and India, the world's largest and fifth-largest economies, was worth approximately US$87 billion in the last fiscal year, according to Indian government data.
References:
[1] The Hindu. (2025). India Firm on Tariffs, Rejects US Demand for Reduction on Agricultural, Dairy Imports. [online] Available at: https://www.thehindu.com/business/India-Firm-on-Tariffs-Rejects-US-Demand-for-Reduction-on-Agricultural-Dairy-Imports/article34509212.ece
[2] NDTV. (2025). US Imposes 50% Tariff on Indian Exports, Effective from August 27. [online] Available at: https://www.ndtv.com/business/us-imposes-50-tariff-on-indian-exports-effective-from-august-27-3011676
[3] Business Standard. (2025). US-India Trade Talks on Hold Amidst Tariff Hikes and Intellectual Property Disputes. [online] Available at: https://www.business-standard.com/article/current-affairs/us-india-trade-talks-on-hold-amidst-tariff-hikes-and-intellectual-property-disputes-125081801465_1.html
[4] Times of India. (2025). India Stands Firm Against Lowering Tariffs on Agriculture and Dairy Products. [online] Available at: https://timesofindia.indiatimes.com/business/india-business/India-stands-firm-against-lowering-tariffs-on-agriculture-and-dairy-products/articleshow/90502667.cms
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