Friday fury ahead? India's tariff clock is ticking

Time of India

2 days ago

As the August 1st deadline looms, India faces potential US tariffs due to unresolved trade negotiations. The US team's visit on August 25th signals a missed deadline, increasing the risk of punitive measures. Trump's administration may use tariffs to pressure India, impacting key export sectors and straining bilateral relations despite mixed signals.
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As the clock ticks toward Friday, August 1, the weight of an unresolved trade deal with the United States is beginning to feel increasingly burdensome for India.The US team will visit India on August 25 -- well after the looming deadline -- for the sixth round of negotiations for the proposed bilateral trade agreement between the two countries, an official told PTI on Tuesday. India faces the strong possibility of punitive tariffs from the US, a development that could send ripples through its export economy and broader diplomatic ties with Washington.The trajectory of US-India trade negotiations has become emblematic of a broader pattern in Washington's trade posture under President Donald Trump . What began as a bilateral discussion aimed at resolving market access issues and addressing tariff asymmetries has evolved into a high-pressure bargaining exercise marked by missed deadlines and implicit threats.Originally slated for July 9, the deadline for concluding the interim trade deal was extended to August 1 by Trump, ostensibly to give negotiations more room. However, the scheduling of a sixth round of talks for August 25 strongly signals that no agreement will be reached in time to meet the new deadline. This delay, while perhaps reflecting the complexity of the deal, is unlikely to be viewed sympathetically by a White House that has increasingly framed trade as a high-stakes, zero-sum game.Trump has already shown a willingness to use tariffs as a tool of leverage in trade negotiations, not just with strategic competitors like China, but with allies and partners alike. India, though spared from a tariff notification letter after the July 9 deadline passed, remains very much in the crosshairs. The administration's hesitation to act then may have been strategic: a calculated move to keep India at the table without escalating tensions prematurely.But the upcoming August 1 deadline carries more urgency. Trump could reassert his trademark coercive tactics, using tariffs to pressure India into faster concessions. The risk is amplified by the current political tone in Washington, where trade deals are increasingly judged by their speed and assertiveness rather than the nuances of diplomacy.In this context, recent remarks made by Treasury Secretary Scott Bessent stand out as a rare, moderating voice. His assertion that 'quality matters more than timing' suggests a recognition of the complexity involved in crafting a sustainable and equitable trade deal. "We're not going to rush for the sake of doing deals," Bessent told CNBC in an interview nearly a week ago. However, he said that tariffs might re-enter the negotiation toolkit if progress stalls, effectively undermining the very caution he advocates. "We'll see what the President wants to do," he said. "But again, if we somehow boomerang back to the August 1 tariff, I would think that a higher tariff level will put more pressure on those countries to come up with better agreements."This duality -- between a push for quality and a readiness to use tariffs -- mirrors the broader contradictions in the Trump administration's trade approach. While the US claims to be seeking mutual benefit, the reliance on deadlines, threats and unilateral pressure points to a strategy of deal-making by domination rather than dialogue.India now finds itself in a delicate position. With little time left before the August 1 deadline, and no further negotiations scheduled until August 25, it must brace for the economic and diplomatic fallout of potential US tariffs. Key export sectors such as pharmaceuticals and textiles could be hit hard by sudden trade barriers. Moreover, the imposition of tariffs would inject fresh tension into an already complex bilateral relationship, one that spans not just trade but also defense, regional security and technology cooperation. If Washington proceeds with punitive measures, it risks alienating one of its key strategic partners in Asia at a time when counterbalancing China is high on both nations' agendas.As August 1 approaches, India faces an unenviable situation: a deadline without a deal, and a partner unwilling to wait. The scheduling of the next round of talks for August 25 makes it all but certain that the two sides will miss the current window for an interim agreement. What remains to be seen is whether Trump will act on his threats or hold off once more in the hope of securing a better, more stable outcome later.Regardless of the immediate outcome, the broader takeaway is clear: India must prepare for a more transactional and turbulent trade relationship with the US, where pressure and pace increasingly trump patience and process.