By Manoj Kumar

FILE PHOTO: U.S. President Donald Trump and Indian Prime Minister Narendra Modi shake hands, at the White House in Washington, D.C., U.S., February 13, 2025. REUTERS/Kevin Lamarque/File Photo/File Photo Purchase Licensing Rights , opens new tab

NEW DELHI, Aug 1 (Reuters) – India is engaged in trade talks with the United States, an Indian government source with knowledge of the discussions said on Friday, a day after U.S. President Donald Trump signed an order imposing a 25% tariff on New Delhi’s exports.

Trump set steep import duties on dozens of trading partners, including a 35% tariff on many goods from Canada, 50% for Brazil, 20% for Taiwan and 39% for Switzerland, according to a presidential executive order.

A U.S. delegation is expected to visit New Delhi later this month, the government source said.

“We remain focused on the substantive agenda that our two countries have committed to and are confident that the relationship will continue to move forward,” India’s foreign ministry said in a statement on Friday.

Trade talks between Washington and New Delhi have been bogged down by issues including access to India’s highly protected agriculture and dairy sector.

Nearly $40 billion worth of exports from the South Asian nation – the world’s fifth largest economy – could be impacted by Trump’s tariff salvo, according to the source.

Without a deal, the rate singles out India for harsher trade conditions than its major peers, potentially damaging the economy of a strategic U.S. partner in Asia that is seen as a counterbalance to Chinese influence.

The source said there is no question of compromising on India’s agriculture and dairy sectors, especially not allowing import of dairy products due to religiously based opposition to animal feed in these products.

On Wednesday, Trump also threatened additional penalties on India for its commercial dealings with Russia and membership in the BRICS group of major emerging and developing economies. There is no clarity yet on the penalty. Trump accuses BRICS of pursuing “anti-American policies”.

Differences between the U.S. and India cannot be resolved overnight to arrive at a trade deal, a senior U.S. official said on Thursday.

The U.S. has a trade deficit of $46 billion with India.

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Manoj Kumar is a Senior Economics Correspondent based in New Delhi. He covers macroeconomy with a focus on India’s economic policies for manufacturing, trade and the rural economy. He has written on a broad range of topics including India’s annual budgets, taxation, inflation, youth unemployment, protests and the impact of government policies on people. Previously, he worked with the PTI news agency and The Tribune newspaper covering ministries of finance, commerce & industry, and petroleum besides parliament.

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