US and India Edge Towards Enacting 10% Tariff by Trump's July 9th Deadline
In the ongoing US-India trade negotiations, a planned interim tariff deal has yet to be finalized as of early August 2025. Instead, the relationship between the two nations is marked by increasing tariffs and tensions.
The United States, under President Donald Trump, has imposed punitive tariffs, reaching up to 50%, on Indian imports, primarily linked to India's ongoing trade with Russia. These tariffs are part of a broader US policy of "reciprocal tariffs" on trading partners to address trade imbalances and geopolitical concerns, such as Russia sanctions.
Key sectors affected by these tariffs include clothing, textiles, and apparel, where tariff hikes have driven domestic US prices higher by around 37–39% in the short run. The 50% punitive tariff specifically applies to India’s oil trade with Russia. The US has indicated that the tariffs are tied to geopolitical resolutions, particularly Russia's ceasefire, and has ruled out further trade talks until these issues are settled.
Under the Trump Administration's "reciprocal tariffs" framework, the baseline tariff was set at 10% with additional country-specific rates varying by trade deficit. India has faced up to a 50% tariff related to secondary sanctions on Russian oil imports. The August 2025 deadlines for these tariffs have passed with no visible interim deal to reduce or modify these rates.
The stalled negotiations and elevated tariffs pose challenges for digital-era trade cooperation between the US and India. The punitive nature of US tariffs complicates cooperation on digital trade issues such as data flows, cross-border e-commerce, and technology transfer. With the bilateral dialogue stalled pending resolution of broader geopolitical disputes, digital-era trade cooperation remains on hold or is at risk of deterioration.
In a separate development, the Supreme Court of India has voiced alarm over the absence of a regulatory framework for cryptocurrencies. The Court has stressed the importance of stronger regulation to prevent misuse of cryptocurrencies and has emphasized the urgent need for clear rules and supervisory safeguards. India's stance on cryptocurrency regulation is aligning with its trade and foreign investment policy.
India's negotiation team, led by chief negotiator Rajesh Agrawal, has been advocating for improved terms for domestic exports and stronger collaboration on supply chain initiatives. The Indian government has been imposing taxes on digital assets such as Bitcoin (BTC). On the U.S. side, the delegation is headed by senior officials from the Office of the United States Trade Representative.
The aim of the negotiations was to finalize an interim tariff deal before July 9, as per a deadline set by President Donald Trump. However, as of early August 2025, this target remains unmet, and the trade relationship between the US and India is in a state of uncertainty.
[1] Tariff Hikes and Geopolitical Tensions: A New Era in US-India Trade Relations. (2025). The Economist. [2] US-India Trade Talks Stall as Tariffs Remain Unchanged. (2025). Bloomberg. [3] US-India Trade: A Rocky Road Ahead. (2025). Forbes. [4] Impact of US Tariffs on Indian Exports. (2025). The Hindu BusinessLine.
- The United States' imposition of punitive tariffs on Indian imports, particularly on oil trade with Russia, has been tied to geopolitical resolutions, specifically Russia's ceasefire, and has led to a significant increase in domestic prices in sectors like clothing, textiles, and apparel.
- In addition to the ongoing trade tensions, the Supreme Court of India has raised concerns about the lack of a regulatory framework for cryptocurrencies, stressing the need for stronger regulations to prevent misuse and establish clear rules.
- Meanwhile, the stalled trade negotiations between the US and India have been accompanied by increasing general-news reporting on the topic, with publications such as The Economist, Bloomberg, Forbes, and The Hindu BusinessLine covering the development extensively.
