U.S. President Donald Trump said a trade deal with India has yet to be finalised and warned of possible higher tariffs ahead of an August 1 deadline to seal an agreement.

His comments followed a Reuters report that India was preparing to accept higher tariffs of 20-25 percent on its exports to the U.S. in the absence of a trade deal, as it holds off on offering fresh concessions ahead of Friday's deadline.

"India has been a good friend, but India has charged basically more tariffs, almost more than any other country," Trump told reporters aboard Air Force One on Tuesday, adding that would come to an end.

Asked about the Reuters report, Trump said a trade deal had not been finalised and India could face steeper tariffs.

India plans to resume broader trade talks with the U.S. in mid-August when a U.S. delegation is due to visit, hoping to seal a comprehensive bilateral trade agreement by October, Indian officials said.

"Talks are progressing well," an official said, adding Trump could issue a tariff order in a "worst-case scenario". The official declined to be identified without authorisation to speak to the media.

"But, we assume it would be temporary measure, considering the five rounds of trade talks that have taken place. A deal will soon be worked out,” the official said.

Trump also reiterated his claim that he helped broker a ceasefire to a conflict between India and Pakistan earlier this year, saying both sides accepted his request.

"That was great," he said describing his friendship with Prime Minister Narendra Modi. India disputes Trump's claims that he brokered the ceasefire.

Analysts say Trump's remarks on the India-Pakistan conflict have cast a shadow on trade negotiations.

On Monday, Trump said most partners that do not negotiate separate trade deals would soon face tariffs of 15 percent to 20 percent on their exports to the United States, well above the broad 10 percent tariff he imposed in April. His administration will notify some 200 countries soon of their new "world tariff" rate.

U.S. Trade Representative Jamieson Greer told CNBC the India talks require more time, noting Trump wants good deals, not fast ones.

India has shown "strong interest in opening portions of its market" though its trade policy had long focused on protecting domestic interests, Greer said.

Piyush Goyal, India's trade minister, told Reuters last week India was making "fantastic" progress in U.S. trade talks.

Indian officials said New Delhi had offered tariff cuts on a wide range of goods and was working to ease non-tariff barriers.

However, agriculture and dairy remain “no-go” areas, with India unwilling to allow U.S. imports of genetically modified soybean or corn, or to open its dairy sector.

Total bilateral goods trade reached about US$129 billion (HK$1.01 trillion) in 2024, with India posting a surplus of nearly US$46 billion.

Officials said India was calibrating its strategy amid broader U.S. tariff threats targeting BRICS nations, including India, over issues such as de-dollarisation and Russian oil purchases.

"We remain hopeful of securing a deal that gives Indian exporters preferential access compared to our peers," a second Indian government official said, speaking on condition of anonymity.

REUTERS

Trump says India deal not finalised, higher tariffs possible