US President Donald Trump’s sharp remarks targeting BRICS nations have sparked fresh uncertainty over the long-delayed India-US trade deal, just months ahead of its anticipated conclusion.
On Tuesday, the Republican frontrunner threatened a fresh 10 per cent tariff on countries “aligning with the anti-American policies of BRICS,” pointing to moves challenging the dominance of the US dollar.
While leaders from both India and the US have consistently assured that bilateral trade ties remain strong and a deal is expected by fall, Trump’s latest warning followed by a harsh 50 per cent tariff on Brazil has cast a long shadow over those plans.
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Irony follows optimism as Trump issues fresh tariff list
Ironically, the warning came a day after Trump claimed he was close to finalising a trade agreement that could exempt India from a 26 per cent reciprocal tariff currently in place.
On Wednesday, Trump followed up with a new round of levies targeting 14 countries. Brazil has been hit the hardest, facing a punitive 50 per cent tariff on several products, including copper. Other countries on the list include Algeria, Libya, Iraq, and Sri Lanka (30 per cent tariffs), Brunei and Moldova (25 per cent), the Philippines (20 per cent), and others across Asia, Africa, and Eastern Europe.
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India-US trade talks likely soon
Talks between India and the US on a proposed trade agreement are still ongoing. According to sources, an Indian negotiating team is likely to visit the US soon for the next round of discussions. In this round, both sides are expected to talk about the interim deal as well as the first phase of the Bilateral Trade Agreement (BTA).
So far, six rounds of in-person meetings have taken place since the announcement of the deal. In addition, several virtual meetings have also been held, where new issues were brought up. After the Indian team returned from their last visit on Friday, they have remained in regular contact with their US counterparts.
Earlier, there were expectations that an interim deal could be announced by July 9. However, since talks are still in progress, the focus has now shifted towards finalising the deal by August.
According to a report by Arihant Capital, this could work in India’s favour by making it a more attractive destination for foreign investment and supply chain diversification amid shifting global trade dynamics, ANI reported.
“India may benefit from relatively lower tariffs compared to many APAC nations,” the report stated, adding that ongoing bilateral agreements and trade talks including the recently signed UK-India Free Trade Agreement and ongoing EU negotiations could strengthen India’s manufacturing ecosystem.
Still, the PM Modi government is treading carefully. Earlier, senior diplomat P. Kumaran confirmed in a press conference that Prime Minister Modi and Brazil’s President Lula da Silva “had no discussion” on the issue during the former’s visit to Rio for the BRICS summit.
However, US President Donald Trump’s escalating tariff rhetoric and the August 1 deadline for implementation continue to keep New Delhi on edge particularly given the broader implications for global supply chains and India’s geostrategic balancing act between Washington and its BRICS allies.
