Wider US tariffs off the table in trade talks for now: Official
'As of now, India and the US are negotiating on the basis of the terms of reference (ToR) that were finalised [in April],' the official said in response to a question on whether wider US tariffs are part of the ongoing negotiations. The official added that the negotiations will continue with the US and the goal remains a bilateral trade agreement (BTA) by the end of the year.
The official said that, currently, only US baseline tariffs of 10 per cent and sectoral tariffs on steel and aluminium—along with fentanyl-related tariffs on China—have come into effect. 'These have resulted in higher duty collections for the US, and their imports from China and specific sectors have gone down,' the official said.
This assumes significance as US President Donald Trump has continued to announce fresh tariffs on countries despite the US having trade deals with some of them, such as Canada and Mexico.
While sectoral tariffs—such as 50 per cent on steel, aluminium and copper—are already disrupting India's exports to the US, Trump has also threatened steep tariffs on BRICS countries over their challenge to the US dollar and has warned of duties on buyers of Russian oil. Notably, India is a top importer of Russian oil.
Trade data show that the US is India's third-largest copper export market, after Saudi Arabia (26 per cent) and China (18 per cent). However, given copper's status as a critical mineral and its extensive use across infrastructure, energy and manufacturing, India's domestic industry is likely to absorb any decline in US demand resulting from the proposed tariffs.
Exporters have said that US tariffs on steel have already impacted India's steel exports.
Earlier this month, Trump said that tariffs on pharmaceuticals could rise to 200 per cent after a year. This is significant, as the US is India's largest overseas market for pharmaceuticals. Drug exports to the US rose to $9.8 billion in FY25, up 21 per cent from $8.1 billion the previous year, and now account for 40 per cent of India's total pharma exports.
Trump added that he is also planning to impose tariffs on imported semiconductors and pharmaceuticals, with medicine tariffs potentially reaching 200 per cent. However, he said drugmakers would be given about a year 'to get their act together'.
'We're going to give people about a year, a year and a half to come in and, after that, they're going to be tariffed,' Trump told reporters during a Cabinet meeting at the White House on July 8.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
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