US extends tariff suspension on India until August 1, boosting trade talk hopes

The United States has extended the suspension of its reciprocal tariffs on India until August 1, a move that provides temporary relief to Indian exporters and offers both nations additional time to finalize an interim trade deal. The White House confirmed the extension on Monday, stating that the suspension, initially set to expire on July 9, was prolonged based on "additional information and recommendations from various senior officials" and ongoing discussions with trading partners.

India, which has been actively engaged in negotiations for a bilateral trade agreement (BTA) with the US, was notably absent from the list of countries that received formal tariff notifications from the Trump administration this week. In contrast, nations such as Bangladesh, Indonesia, Japan, South Korea, Malaysia, Thailand, and South Africa were served with letters outlining tariffs set to take effect on goods entering the US from August 1. President Trump had initially announced reciprocal tariffs, including a 26% duty on India, on April 2, but had paused their implementation for 90 days to allow for negotiations.

Indian exporters have welcomed the deferment, viewing it as a crucial window to push for favorable outcomes. Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), stated, "This deferment reflects the US's readiness to talk and helps our negotiators address the remaining contentious issues." International trade expert Biswajit Dhar described the move as a clear sign of relief for India, attributing it to the country's firm stance in ongoing discussions. While cautioning against complacency due to President Trump's unpredictable nature, industry leaders are optimistic about the additional working days for dialogue. India and the US are targeting a broader trade agreement, with the first tranche expected by September-October this year, and are currently working to finalize an interim deal. Indian officials have reportedly conveyed New Delhi's position, placing the next move with Washington. The US remains India's largest trading partner, with bilateral goods trade reaching $131.84 billion in 2024-25.