Trump warns of possible tariff hike if India-US trade talks fail

US President Donald Trump has indicated that tariffs on India may remain elevated for now, as the two countries failed to reach an agreement that was expected to be signed by August 1.

Trump's remarks came in response to a Reuters report revealing that India is preparing to accept a tariff increase of at least 20-25% on its exports to the US if it does secure concessions before Friday.

"India has been a good friend, but India has imposed higher tariffs, almost more than any other country," Trump stated during a conversation with journalists on Tuesday.

When questioned about the Reuters report, Trump confirmed that a deal had yet to be finalised and warned that if it is not signed, India could face steeper tariffs.

Read: Trump warns Apple of 25% tariff if iPhones are made in India

In addition to India, discussions are slated to resume in mid-August, after the deadline has passed, according to an Indian official. A US delegation is expected to visit India with hopes of sealing a comprehensive bilateral trade agreement by October.

"Talks are progressing well," the official remarked, adding that Trump could issue a tariff order in a "worst-case scenario." The official requested anonymity, as they were not authorised to speak to the media.

"However, we anticipate that this would be a temporary measure, considering the five rounds of trade talks that have already taken place. We believe a deal will be reached soon," the official stated.

On Monday, Trump announced that countries failing to negotiate their own trade agreements would soon face tariffs or taxes on imports, ranging from 15% to 20% on goods sent to the United States. 

Read: US raises tariffs on Chinese imports to 245%

This marks a significant increase from the 10% tariff he announced in April. His administration will soon notify around 200 countries of these new "world tariff" rates.

US Trade Representative Jamieson Greer shared with CNBC that ongoing trade discussions with India will take additional time, as Trump seeks solid agreements rather than quick fixes.

Greer noted that India is interested in providing greater access to its market, although its previous trade policies have primarily focused on protecting domestic businesses.