US President Donald Trump signaled on Wednesday that a trade deal with India is close, potentially shielding it from steep reciprocal tariffs set to take effect on August 1. Speaking to reporters, Trump drew parallels with a recent US-Indonesia deal, which slashed Indonesia’s tariffs from 32% to 19% in exchange for full US market access. “I think something similar would happen with India,” Trump said, hinting at a deal to reduce India’s 26% tariff, initially announced on April 2, to below 20%.

The comments follow intense negotiations, with an Indian Commerce Ministry delegation, led by Special Secretary Rajesh Agrawal, in Washington this week to finalize an interim agreement. India seeks relief from high US tariffs on steel (50%), aluminum (50%), and auto imports (25%), while resisting US demands to open its dairy and agriculture sectors, citing risks to 80 million small farmers.

Trump’s remarks align with his “Fair and Reciprocal Plan,” which aims to address a $41.18 billion US trade deficit with India by matching foreign tariffs. Bilateral trade hit $131.84 billion in 2024-25, with India pushing for a $500 billion target by 2030. While no formal agreement has been signed, Trump’s optimism suggests a deal could cover labor-intensive exports like textiles and footwear, excluding sensitive agricultural issues.

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However, Trump’s threat of additional 10% tariffs on BRICS nations, including India, for “anti-American” policies adds uncertainty. Indian negotiators have drawn “red lines” on agriculture, and any deal may be a pressured compromise rather than a full partnership, with a minimum 10% US tariff likely to remain.

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