US President Donald Trump said on Tuesday that the United States is close to getting full trade access to India. He said that earlier, American businesses had little or no access to many countries, including India. But now because of the tariffs that US has imposed, those countries are opening up their markets. He also said that the US has reached a trade deal with Indonesia after talks with its President, Joko Widodo, also known as Prabowo Subianto, according to CNN.
India in “wait and watch mode” on Trump tariffs
India will decide how to respond to the upcoming US tariffs only after fully understanding their impact, a senior government official told PTI on Tuesday. The new duties are set to take effect from August 1, and until then, India is taking a “wait and watch” approach.
The official revealed that a response or backup plan can only be made after knowing the actual effects of the US tariffs, and as of now, it’s not possible to predict how the different tariff levels will impact India once they come into effect.
The official mentioned that they have tariff details for around 25 countries. The US has said it will finalise several trade deals within the next two weeks. So, it’s important to see what these agreements lead to and what the complete tariff structure will look like by August 1. Without that clarity, it’s hard to prepare any kind of backup plan.
The comment came in response to a question on whether India is working on a plan to handle the possible impact of Trump’s tariffs.
India-US Bilateral Trade Agreement
Back in February, India and the US agreed to begin talks on a Bilateral Trade Agreement (BTA). Both sides aim to complete the first phase of the deal by September or October 2025. They had agreed on the basic framework of the talks in March. Since then, they have held three rounds of discussions in April, June, and again in early July. The fifth round of talks began on Monday in Washington.
India’s chief negotiator, Special Secretary Rajesh Agrawal, will join the talks on Wednesday. The current round is expected to go on until Thursday.
These talks are happening simultaneously when Trump has started sending formal letters to different countries and trade groups, informing them of the new tariffs starting August 1. While these tariffs are being imposed unilaterally, the US has also offered to hold trade talks with all affected countries.
“We need not worry much. We should wait for it (US duties) to play out and as soon as it plays out, the government can come out with something to see what best needs to be done for the country,” the official said.
Another official said that apart from China, most countries have only seen tariff announcements so far, not actual changes. So, the overall trade positions haven’t shifted much. Despite this, India’s export performance remains strong. The official also pointed out that it’s still unclear whether the new tariff differences will actually take effect from August. “That is something we need to wait and watch. We are in the same boat as others,” the official said.