The sudden postponement of planned trade talks and the imminent threat of higher tariffs have created a moment of significant uncertainty in the bilateral economic relationship between the United States and India. The sixth round of negotiations has been cancelled. It was originally scheduled to take place in New Delhi from August 25 to August 29, 2025.
Both parties are currently awaiting a rescheduling of the visit, however no new date has been supplied as of yet. Indian authorities have been verbally notified but have not received any formal written information.
President Donald Trump has set an August 27 deadline, after which tariffs on Indian exports to the US might increase, rising from the current 25% to 50%. This news comes at a crucial time. In addition to the proposed secondary penalties that further jeopardise Indian trade, Washington has officially justified this action as a response to India’s ongoing purchases of weapons and oil from Russia.
In effect, India faces higher penalties than nations like Vietnam, Indonesia, or Japan, whose tariffs are still relatively low, as the tariff hike puts Indian exporters at a significant disadvantage when compared to other regional competitors.
Controversial concerns, particularly the US demand for broad market access in highly protected industries like dairy and agriculture, have hampered the trade talks themselves. Citing the urgent need to protect the lives of small and marginal farmers and cattle rearers, India has adamantly opposed these requests.
In recent public speeches, Prime Minister Narendra Modi has reiterated his support for local manufacturers and stated that national interests in these areas will not be jeopardised.
India, the world’s fifth-largest economy, and its larger goals to double bilateral trade with the US to $500 billion by 2030 are at serious risk if the announced duties are implemented, which could impact nearly $40 billion of Indian exports. The postponement of negotiations and continued tariff threats have had real consequences.
These new responsibilities now depend, at least in part, on how recent diplomatic and geopolitical encounters turn out. Notably, President Trump and Russian President Vladimir Putin met in Alaska to discuss the Ukraine situation, which has given India a little window of opportunity.
Although there was no immediate breakthrough, Trump’s support for Putin on a potential peace agreement for Ukraine and his comments afterward have put secondary tariffs on hold for the next two to three weeks, indicating a wait-and-see strategy, particularly with regard to major economies like China, another important purchaser of Russian crude oil.
Even with the stressful situation and deadlines approaching, Indian and American officials are publicly expressing hope. Even while it now seems likely that the process will take longer than anticipated, negotiators on both sides maintain that discussions are still productive and that the pursuit of a complete deal is still proceeding. With officials prioritising long-term alignment and solutions over temporary interruptions, India is attempting to maintain a positive posture. But the unwillingness to make new compromises before deadlines highlights the ongoing economic and strategic conflict.
There is a vicious circle of uncertainty and difficult negotiating in the commercial relationship between the US and India. Indian exporters and government officials are under tremendous strain as a result of the sudden postponement of negotiations and the possible increase of tariffs.
The position is still quite fluid, with both opportunities and threats in the next weeks as the changing geopolitical landscape and diplomatic talks with Russia interfere. While Indian authorities are emphatic about not sacrificing domestic dairy and agricultural interests for short-term trade advantages, they are also preparing for impact and hope for a positive breakthrough before the feared secondary tariffs go into place.
(Report compiled from several August 17, 2025, news reports by TOI, NDTV, and others.)
