WASHINGTON, DC – President Donald Trump announced a 25% tariff on Indian goods starting August 1, citing India’s high farm tariffs and trade barriers. Reuters reports that agriculture remains a core issue derailing progress toward a bilateral trade deal between the two countries.
U.S. negotiators have pushed for greater access to India’s agriculture, ethanol, dairy, and medical markets. But India has resisted, arguing that opening its markets to subsidized U.S. farm goods would threaten the livelihoods of millions of small farmers. U.S. farm exports like corn, soybeans, and ethanol were excluded from recent talks.
India’s average tariff on agricultural imports is 39%, compared to 5% in the U.S. Some farm duties are as high as 50%, according to the White House. The Trump administration has repeatedly cited these barriers as an obstacle to deeper trade ties.
India has boosted energy and defense imports from the U.S. and maintains hopes for long-term growth in exports, especially pharmaceuticals, electronics, and apparel. But recent tensions—including U.S. remarks on Pakistan—have added diplomatic strain. With trade talks stalled, Indian exporters now face rising levies across a broader range of goods.