【By Observer Net, Wang Yi】With the UK, EU and other countries gradually finalizing trade agreements with the US, India, which was the first to start negotiations, has not yet seen the shadow of a deal. According to Xinhua News Agency, the deadline for trade negotiations is approaching, but there are still differences between the US and India in areas such as automobiles, steel, and agriculture.

On July 29 local time, US President Trump warned that if an agreement cannot be reached in time, the US will impose tariffs of up to 25% on Indian goods.

"They will pay 25%." When asked by reporters whether India would face tariffs of 20% to 25%, Trump replied, "Yes, I think so. India has always been - they're my friends."

One day earlier, US Trade Representative Jamison Grier publicly stated that the US and India still need "more negotiations" to reach a trade agreement. He said that India has shown a strong willingness to open part of its market, and the US is also willing to continue consultations, "but we still need more negotiations to see how ambitious our Indian friends really want to be."

India seems to have completely given up on reaching an agreement before August 1. Two Indian government sources revealed that India is preparing for temporary tariffs of 20% to 25% on some of its goods from the US. Before that, India will not make new trade concessions, but plans to restart comprehensive trade negotiations during the visit of the US delegation in mid-August, aiming to finalize the bilateral agreement by September or October.

One of the Indian officials said, "The worst case scenario" is being charged 20% to 25% tariffs, but they believe this is only a temporary measure, after all, both sides have conducted five rounds of trade negotiations, "an agreement is imminent."

Indian officials said that India has proposed reducing tariffs on various goods and has made efforts to relax non-tariff barriers. However, agricultural products and dairy products remain "forbidden areas," and India refuses to allow the import of genetically modified soybeans and corn, and is unwilling to open the domestic dairy market.

Another Indian official also pointed out that due to the US's wide-ranging tariff threats against the de-dollarization and purchasing Russian oil by the BRICS countries including India, India is weighing its strategy and delaying making new concessions.

However, the official said, "We still hope to reach an agreement that gives Indian exporters an advantage over their counterparts in other countries."

Although Trump has not yet threatened India with new tariff letters as he did with more than a dozen other trading partners, he set the tariff on Indian goods at 26% on April 2, then suspended it several times, leaving time for negotiations.

According to reports, in recent trade agreements, Trump further required countries to open up "previously closed markets" to US goods. For India, he often criticized the country's trade relationship with the US as "very difficult," saying that it has set extremely high trade barriers for US goods.

In February this year, Modi met with Trump at the White House. Visual China

"They charge higher tariffs than any other country," Trump said in February before meeting with visiting Indian Prime Minister Modi. Later, when the two met, Trump told Modi directly, "You have not treated us properly."

Aside from high tariffs, the White House is also dissatisfied with India's non-tariff barriers, including taxes on digital services and "extremely complicated" testing regulations for foreign imported goods.

Data from the Office of the US Trade Representative shows that the bilateral trade volume between India and the US in 2024 was approximately $129 billion, with the US exporting $41.8 billion worth of goods to India and importing $87.4 billion, resulting in a trade deficit of $45.7 billion. According to data from the Ministry of Commerce and Industry of India, India's exports of goods to the US increased by 23.53% to $8.3 billion in June, while imports decreased by 10.61% to about $4 billion.

For months, both the US and India have been very "optimistic" externally, claiming that the trade agreement is "about to be reached." Trump said on July 16 that the US and India might "soon" reach a trade agreement. On the 24th, India's Minister of Commerce and Industry, Piyush Goyal, also said that the negotiations were "making remarkable progress."

But on the 26th, three informed sources revealed that the US and India are unlikely to reach an agreement before August 1, with one even describing the current negotiation status as "a mess." Rick Rossow, Chairman of the India Policy Research Program at the Center for Strategic and International Studies (CSIS), also said that although Indian officials speak optimistically, "it seems almost impossible to reach an agreement before August 1."

Now, Britain, the EU, and other US trade partners have announced agreements with the US, and Trump has also reached preliminary trade frameworks with Vietnam, Japan, and the Philippines. India has also signed a free trade agreement with the UK.

Some US media believe that these agreements may reflect the potential outline that India expects: Indian exported goods to the US may be taxed at 15% to 20%, while most US goods may enjoy zero tariffs. However, many tricky issues remain vague, and to reach an agreement, it often requires calls or meetings between the leaders of the two countries.

Analysts say that although Trump and Modi are reportedly on good terms, Trump's unpredictable role in other agreements makes the final solution of the US-India talks more uncertain.

For India, one of the biggest risks is that its goods ultimately face higher tariff rates than Asian competitors. Vietnam currently has a tariff rate of 20%, and if India exceeds this level, the country may lose valuable advantages.

But regardless, the final decision lies with Trump. Mukesh Aghi, Chairman and CEO of the US-India Strategic Partnership Forum, believes that India should label the trade agreement as "a trillion-dollar deal," "the US president wants to talk to the head of state and then announce 'we have reached an agreement,' " what Trump wants is just a headline.

This article is an exclusive article from Observer Net. Reproduction without permission is prohibited.

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