By Manoj Kumar
NEW DELHI (Reuters) -India is preparing to face higher U.S. tariffs — likely between 20% and 25% — on some of its exports as a temporary
measure, as it holds off on fresh trade concessions ahead of Washington's August 1 deadline, two Indian government sources said.
Instead, New Delhi plans to resume broader trade negotiations when a U.S. delegation visits in mid-August, with the goal of finalising a comprehensive bilateral agreement by September or October, one of the Indian officials told Reuters.
"Talks are progressing well, and a delegation is expected in Delhi by mid-August,” one of the Indian government officials said, adding that President Donald Trump could issue a tariff letter imposing duties of 20 or 25% in a "worst-case scenario".
"However, 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 said on Monday 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.
U.S. Trade Representative Jamieson Greer told CNBC on Monday that talks with India required more negotiations as Trump was more interested in good deals than quick deals.
India has shown "strong interest in opening portions of its market" though its trade policy had long focussed on protecting domestic interests, Greer said.
Piyush Goyal, India's trade minister, told Reuters last week India is making "fantastic" progress in U.S. trade talks.
Indian officials said New Delhi has offered tariff cuts on a wide range of goods and is working to ease non-tariff barriers.
However, agriculture and dairy remain “no-go” areas, with India unwilling to allow 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 trade surplus of nearly $46 billion.
India is holding back on fresh offers while calibrating its strategy amid broader U.S. tariff threats targeting BRICS nations, including India, over issues such as de-dollarisation and purchases of Russian oil, said another official.
"We remain hopeful of securing a deal that gives Indian exporters preferential access compared to our peers," the official said.
Officials spoke on condition of anonymity as they were not authorised to speak to media.
India's commerce ministry and the U.S. Trade Representative's Office did not immediately respond to emailed requests for comments.
"We need more negotiations with our Indian friends to see how ambitious they want to be," Greer said.
Analysts said, without a deal, Indian exports could face average U.S. tariffs of around 26%, higher than those faced by Vietnam, Indonesia, Japan or the European Union.
(Reporting by Manoj Kumar; editing by Giles Elgood)
