President Trump warns of a possible 10% tariff on India

President Donald Trump’s warning that he could slap an extra 10% tariff on India over its role in the BRICS group has put New Delhi in a tight spot as it rushes to finalize a trade agreement with Washington. 

He made the remark on Tuesday, just a day after saying he was close to sealing the deal as reported by Bloomberg.

In his comments, Trump said India could face the additional levy alongside other BRICS members, whom he labeled “Anti-American.” He spoke shortly after suggesting progress on a pact that Indian negotiators hope will spare them from the hefty reciprocal tariffs they now face.

The threat came on after a two-day BRICS summit in Brazil, where leaders issued a joint statement condemning “trade-distorting tariffs.”

Brazil and South Africa publicly criticized Trump’s remarks, but India stayed silent, underlining its effort to balance its BRICS ties with its growing partnership with the United States.

India has no plan to ditch the U.S. dollar

Officials in New Delhi said they were not too worried.  They noted the U.S. view that BRICS wants to weaken the dollar does not fit India’s aims. Those officials, speaking on condition of anonymity, said India will not support a single BRICS currency.

Any talks on local currency trade are meant only to lower banking and foreign exchange risks.

At a Tuesday press briefing, senior diplomat P. Kumaran said Prime Minister Narendra Modi and Brazil’s President Luiz Inácio Lula da Silva “had no discussion” on the tariff threat during Modi’s state visit to Brazil. “We didn’t have an opportunity to discuss that,” he told the press.

As India prepares to assume the BRICS chairmanship in 2026, it must distinguish itself from members such as China and Russia, who see the group as a way to push back against the U.S.

New Delhi hopes that its strong relationship with Washington and its decision to keep using the dollar will win it extra favor in BRICS.

“Trump is unhappy with BRICS members who have been talking about an alternate reserve currency,” said Mohan Kumar, a former Indian envoy and lead negotiator at the World Trade Organization. “India has repeatedly made clear that local currency trade is not the same as de-dollarization.”

Trade deal seen as key to restoring U.S.-India ties

Over the years, successive U.S. administrations have cultivated India as a key strategic partner and a regional check on a rising China.

In April, U.S. Vice President J. D. Vance said the outcome of the twenty-first century “is going to be determined by the strength of the United States and India’s partnership.”

These ties were strained after Trump claimed he brokered a ceasefire between India and Pakistan in May. Modi pushed back, saying he did not use trade as a tool to secure the truce.

Meanwhile, the Trump administration’s outreach to Pakistani leaders, including the powerful army chief, has raised concerns in New Delhi.

Much now depends on the proposed trade deal, which both sides aim to seal by this fall.

Shashi Tharoor, an opposition lawmaker who led India’s diplomatic response after the Pakistan conflict, said in London on Tuesday, “If the terms are agreed, that will be a very, very healthy sign.”

After months of talks, Indian negotiators have offered their best proposal to Washington and await a response.

Some observers say Trump’s fresh tariff threat is a tactic to win more concessions from New Delhi before finalizing the pact. He has warned in the past of 100% duties on any BRICS member that moves toward de-dollarization.

Experts urge a clear view of the difference between Trump’s warnings and his actions.

“We need to distinguish between President Trump’s narrative and his action,” Mr. Kumar said, suggesting India still has room to navigate a path that balances its BRICS role with its special ties to the United States.

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