US Extends Tariff Suspension for India Until August 1, Easing Pressure on Ongoing Trade Talks

New Delhi, July 8: The United States has announced a crucial extension of its proposed reciprocal tariffs on Indian goods until August 1, 2025. This decision provides significant relief to Indian exporters and grants both New Delhi and Washington additional time to finalise an interim trade agreement.

Originally, the suspension of these 26% reciprocal duties, which were announced by US President Donald Trump on April 2, was set to expire on July 9. The initial 90-day pause was intended to facilitate negotiations with various trading partners. The White House has now officially confirmed this extension through Executive Order 14266, citing ongoing discussions with several countries as the reason for the delay. Executive Order 14266, initially issued on April 9, 2025, temporarily suspended certain reciprocal tariff rates for 90 days, and the latest announcement extends this suspension further.

India Excluded from New Tariff Notifications

Notably, on Monday, the US administration issued the first set of formal tariff letters to a number of countries, with India conspicuously absent from this list. Nations such as Bangladesh, Indonesia, Japan, South Korea, Malaysia, Thailand, South Africa, Bosnia and Herzegovina, Cambodia, Kazakhstan, Laos, Serbia, and Tunisia all received official notices detailing tariffs that will be imposed on their goods entering the US starting August 1.

This exclusion of India is widely interpreted as a positive signal, indicating the US’s continued interest in reaching a comprehensive trade deal with New Delhi rather than imposing duties.

Exporters Welcome the Move

New Delhi, July 8 – The United States has announced a crucial extension of its proposed reciprocal tariffs on Indian goods until August 1, 2025. This decision provides significant relief to Indian exporters and grants both New Delhi and Washington additional time to finalise an interim trade agreement.

Originally, the suspension of these 26% reciprocal duties, which were announced by US President Donald Trump on April 2, was set to expire on July 9. The initial 90-day pause was intended to facilitate negotiations with various trading partners. The White House has now officially confirmed this extension through Executive Order 14266, citing ongoing discussions with several countries as the reason for the delay. Executive Order 14266, initially issued on April 9, 2025, temporarily suspended certain reciprocal tariff rates for 90 days, and the latest announcement extends this suspension further.

Exporters Welcome the Move

Indian exporters and trade bodies have largely welcomed the extension, viewing it as a window of opportunity.

Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), stated that the move reflects the US’s willingness to maintain constructive engagement with India. FIEO, as the apex body of Indian export promotion organisations, plays a crucial role in representing Indian exporters and advocating for their interests with policymakers.

“It provides an extended window for dialogue, which can help our negotiators to sort out remaining contentious issues,” Sahai remarked. He further added that if India manages to finalise a bilateral trade agreement (BTA) with the US by the end of this month, it could significantly improve India’s comparative advantage in global trade, especially as other countries grapple with new tariff challenges.

Another exporter pointed out that the delay effectively offers 12–13 more working days to hold critical technical discussions and push through the interim pact.

Mixed Sentiment Amid Tight Timeline

Despite the temporary relief, some concerns persist among the exporting community due to the tight deadline and the unpredictable nature of trade negotiations under the current US administration.

The FIEO President and a Ludhiana-based exporter described it as a “small relief” and expressed cautious optimism, stating, “We are keeping our fingers crossed.” Sharad Kumar Saraf, a Mumbai-based exporter and founder of Technocraft Industries (India), echoed this caution, highlighting the unpredictability of the Trump administration in trade matters. He urged Indian exporters to diversify their export markets to mitigate potential risks proactively.

India-US Trade Outlook

India and the US are engaged in active negotiations for a bilateral trade agreement, with the ambitious goal of finalising the first tranche by September–October this year. Prior to that, both sides were intensely focused on concluding an interim trade deal, which would address immediate market access and tariff concerns.

Officials indicate that India has already conveyed its position on key outstanding issues, including India’s stance against opening its sensitive dairy and agriculture sectors to US imports, and is now awaiting a detailed response from Washington. The US, on its part, is keen on greater market access for its industrial goods, automobiles (including electric vehicles), petrochemicals, and specific agricultural products like apples and tree nuts. India is pushing for reduced US tariffs on its labour-intensive exports, such as apparel, textiles, gems and jewellery, and leather goods.

US Remains India’s Top Trading Partner

The United States has remained India’s largest trading partner since FY22. In FY25, bilateral merchandise trade between the two nations reached a substantial USD 131.84 billion. India’s exports to the US amounted to USD 86.51 billion, while imports stood at USD 45.33 billion, resulting in a significant USD 41.18 billion trade surplus in India’s favour.

This extension provides a critical window for negotiators to bridge remaining gaps and potentially secure a deal that could further solidify economic ties between the two global powers.

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