India has consistently refused to fully open its agriculture sector, particularly around genetically modified crops and dairy products
US President Donald Trump said on Friday he has signed letters to 12 countries outlining tariff levels they will face in what he described as “take it or leave it” offers, with the communications set to go out on Monday.
Speaking to reporters aboard Air Force One, Trump declined to name the countries involved. He also raised the stakes, saying tariffs could now reach as high as 70% – up from previously threatened levels of 50% – with most set to take effect August 1.
“I signed some letters and they’ll go out on Monday, probably twelve,” Trump said, according to news agency Reuters. “Different amounts of money, different amounts of tariffs.”
India appears likely to be among the 12 countries receiving the letters, according to officials familiar with the matter in New Delhi, after intensive negotiations failed to produce a complete breakthrough that would have averted higher tariffs.
“It may not be surprising if India figures in the list because outcomes of the bilateral trade negotiations since March this year until middle of current week were not as per Trump’s expectations,” said one person aware of the matter, speaking anonymously.
“Had it been so [if Trump accepted the terms], both Washington and New Delhi would have announced a deal by now.”
Trump’s announcement came immediately after India’s negotiating team returned from Washington following week-long talks that began June 26 – the fourth face-to-face negotiating round since March. The team, led by chief negotiator Rajesh Agrawal, had been pursuing what officials called an “early harvest” or mini trade deal.
Fundamental disagreements remain over market access, with “the US wanting unfettered access for American agriculture goods in the Indian market, a highly sensitive area for New Delhi as it involves the livelihood of millions of subsistence farmers,” the person said.
India has consistently refused to fully open its agriculture sector, particularly around genetically modified crops and dairy products. The country remains unwilling to allow items like soybean and corn unless certified as non-GM, since such crops are banned domestically.
Another major sticking point is “duty-free access in the Indian automobile sector,” the person added. “The Trump administration wants all without committing to withdraw the Liberation Day tariff, and other punitive tariffs on Indian steel, aluminium, automobiles and auto parts.”
Faced with the deadlock, India escalated the dispute beyond bilateral channels, the person added.
“Hence on return of its negotiating team from Washington, India on July 3 put the US on 30-day notice at the WTO before suspending concessions or other obligations on American imports,” the person explained.
Officials of the commerce ministry did not respond to requests for a comment on the matter.
A second person said bilateral discussions continue through virtual channels and a breakthrough remains possible.
“If India’s interest is served, an initial deal can still be achieved by July 9,” this person added, requesting anonymity. He added that “irrespective of deadlines, India will not sign any deal that is not balanced, equitable and a win-win.”
“Both countries remain committed to reaching the first tranche of a bilateral trade agreement by October 2025, as directed by Modi and Trump during their February 13 meeting”. That broader deal would include services and investment provisions beyond the current focus on goods.
New Delhi and Washington have been attempting to thrash out a trade deal since Trump’s February 13 summit with Prime Minister Narendra Modi, where both leaders agreed to more than double bilateral trade to $500 billion by 2030.
Despite the ambitious target, tensions escalated as Trump reimposed and expanded tariffs.
In March, the US imposed 25% tariffs on steel and aluminium imports from all countries, ending exemptions that had protected some trading partners. On March 26, Trump added 25% duties on passenger vehicles, light trucks and certain automobile parts, specifically targeting imports from countries including India.
The situation deteriorated further when Trump declared April 2 as “Liberation Day,” announcing a global 10% baseline tariff plus additional country-specific levies. India faced a combined 26% tariff – the 10% baseline plus an additional 16% reciprocal tariff.
Trump suspended the additional tariffs for 90 days to allow negotiations, but that reprieve expires July 9. India had initially demanded complete withdrawal of all punitive tariffs but softened its position to focus on partial relief in exchange for limited agricultural concessions.
Commerce minister Piyush Goyal on Saturday defended India’s approach, saying the country “negotiates from a position of strength and not under deadlines.”
He reiterated this position on Saturday when he rebutted opposition leader Rahul Gandhi’s charge that the Modi government would “meekly bow” to Trump’s tariff deadline.
Goyal accused the previous Congress-led United Progressive Alliance government of “negotiating and signing agreements that were not in the national interest.”
The day before, Goyal had emphasised that “India never negotiates trade deals with a deadline” and would announce any agreement only when it is “fully finalised, properly concluded and in the national interest.”
Trump’s ultimatum strategy reflects broader challenges in completing complex trade agreements on an accelerated timeline. Most traditional trade deals take years to negotiate, but Trump’s administration has sought to compress that process into months.
To date, Trump has reached agreements with only Britain and Vietnam. Britain secured a deal in May but accepted a pact to keep tariffs at 10% with preferential treatment for sectors including autos and aircraft engines. Vietnam, threatened with a 46% combined rate, negotiated a reduction to 20% with many US products allowed to enter duty-free.
