Today’s top story for India Tariff News and Tracker: Listeners, in a major development, the US remains poised for a pivotal shift in its trade relationship with India. Just weeks after former President Donald Trump enacted sweeping tariff hikes on Indian goods—raising duties to a staggering 50% as of August 27, 2025, according to WION News—trade talks between Washington and New Delhi have entered their final phase. This increase has hammered critical Indian export sectors such as textiles, gems, jewelry, and leather, prompting widespread concern among Indian business leaders over both economic impacts and the diplomatic future of India-US ties.

At a recent APEC CEOs Luncheon in South Korea, Donald Trump publicly reaffirmed his commitment to striking an imminent trade deal with India. He expressed “great respect for Prime Minister Modi” and announced, in his own words, “I am going to do a trade deal with India,” as reported by the Economic Times and NDTV Profit. Negotiators are said to be closing in on an agreement that could slash the US tariff on Indian exports from the current 50% to 15%. Such a reduction, if enacted, would provide much-needed relief to India’s beleaguered exporters and would go a long way toward revitalizing bilateral trade. According to officials quoted by the Economic Times, “the contours of the deal are still being finalised,” but optimism is high that a breakthrough is near.

This push for a deal follows months of fraught negotiations since February, with US officials demanding greater access to India’s agricultural market, a curb on the US trade deficit, and a reduction in Indian imports of Russian oil. India, for its part, has been steadfast in protecting its farm sector and is reportedly adjusting its energy sourcing under US pressure.

Despite the positive signals, there remains uncertainty around the durability of any future agreement. The Economic Times notes that Trump’s view of tariffs as leverage for both economic and geopolitical objectives means that even a formalized pact may not fully shelter India from future US tariff threats. Trump’s own track record—using tariffs to influence India’s foreign policy choices, including claims of pressuring India in recent Pakistan tensions—suggests that tariffs will continue to be a tool in US diplomatic strategy.

For Indian businesses, this moment presents both a challenge and an opportunity. If tariffs do fall to the proposed 15%, Indian exports to the US could recover substantially, especially in key manufacturing, IT, and textile sectors. However, the landscape is still volatile, with the possibility of snap tariff hikes always looming due to shifting US trade and foreign policy aims.

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