Trump’s Global Tariff Ultimatum Looms: India Races To Finalise Trade Pact With U.S. Amid 20% Threat

Behind closed doors, there is anxiety. A delegation of U.S. negotiators is expected to land in New Delhi by mid-August, a timeline that overshoots Trump’s deadline.

Representational image (ANI)

New Delhi/Washington: With days to go before U.S. President Donald Trump’s August 1 tariff deadline, trade officials from India and the United States are locked in intense negotiations, scrambling to seal a bilateral agreement that could shield India from a new wave of sweeping import duties.

At the centre of the urgency is Trump’s latest pronouncement related to a blanket tariff ranging from 15% to 20% on imports from any country that has not cut a separate trade deal with Washington. “For the world, I would say it will be somewhere in the 15 to 20 per cent range. I just want to be nice,” Trump said at Turnberry, Scotland, standing alongside U.K. Prime Minister Keir Starmer.

Still in the negotiation phase, India risks being hit by this penalty if talks do not conclude before Trump’s self-imposed cutoff. While India’s lead negotiator Rajesh Agrawal is presently in Washington, officials back home are tight-lipped about any breakthrough.

“We are in a very, very advanced stage of discussions with Oman, the E.U. and the U.S. We are also discussing with New Zealand, Chile and Peru... So, we are busy right now on many FTAs simultaneously,” Commerce and Industry Minister Piyush Goyal said on Saturday.

Asked if the U.S. deal would be done before the tariff hammer falls, Goyal refused to commit to a timeline.

But behind closed doors, there is anxiety. According to sources in the Ministry of Commerce and Industries, a delegation of U.S. negotiators is expected to land in New Delhi by mid-August, a timeline that overshoots Trump’s deadline.

The U.S. president’s tariff warning marks a departure from his earlier 10% baseline. “We are going to be setting a tariff for essentially the rest of the world, and that is what they are going to pay if they want to do business in the United States. You cannot sit down and make 200 deals,” he said.

For smaller nations, many of whom had expected a 10% rate, the sudden escalation could be punishing. Commerce Secretary Howard Lutnick had earlier hinted that countries in Latin America, Africa and the Caribbean might face a flat 10% rate. That now seems off the table.

Meanwhile, India is not alone. Japan, Indonesia and the E.U. have already been hit with new duties – 15%, 16% and 15% respectively. Even countries like Brazil and Laos, which are seeking to counterbalance U.S. pressure, have retaliated with tariffs as high as 40% and 50%.

Finance Minister Nirmala Sitharaman struck a cautiously optimistic tone. At a book launch over the weekend, she confirmed that trade talks with the United States were “progressing well”, though she too stopped short of setting expectations on timing.

For India, the stakes go beyond tariffs. Goyal said the India-U.K. Free Trade Agreement (FTA), signed earlier this year, had opened doors to a broader strategy of negotiating with “complementary economies”, in contrast to the UPA-era FTAs that were often inked with direct competitors like ASEAN.

“The business opportunities, the quality and cost competitiveness of Indian goods and services, the demographic dividend of our young and aspirational population, the rule of law and the strength of our democracy all make India a preferred global partner,” Goyal said.

That sentiment may offer little comfort if Trump’s deadline passes without a deal. India presently faces the risk of a 26% reciprocal tariff in the absence of a U.S. agreement, a rate that could devastate export-heavy sectors.

As of now, the world’s largest democracy is negotiating against the clock and against an unpredictable president who appears eager to reset the rules of global trade.