India Plays Hardball: Chasing a Sub-10% Trump Tariff While Rivals Settle for Over 20%

India is playing hardballand fast. With an August 1 deadline looming, officials are in Washington trying to hammer out a trade deal with President Trump that undercuts the tariff terms he just gave Indonesia. Trump announced a 19% tariff on Indonesian goods this week, down from a threatened 32%, and hinted India's deal would land along that same line. But New Delhi is shooting lower. According to people familiar with the talks, the goal is to lock in a tariff rate under 10%, giving India a potential leg up over Vietnam's 20% rate and reshuffling the regional competitiveness deck.

To sweeten the offer, India has proposed zero tariffs on U.S. industrial goodsif Washington reciprocates. It's also dangling bigger buys of Boeing BA planes and possibly widening access to select U.S. agricultural products, though the country remains firm on keeping its domestic dairy and farming sectors shielded. Soumya Kanti Ghosh, chief economist at State Bank of India and an adviser to the prime minister, noted that the U.S. will likely want something substantial in return. Significant concessions may be part of the final handshake, especially if New Delhi wants to break that 10% threshold.

Trump's pattern is emerging: threaten high, negotiate down. Barclays economist Brian Tan sees the 1520% range as Trump's tactical sweet spot, but India appears to be betting on a different outcomeone that could position it as a preferred U.S. partner in Asia. With Malaysia still waiting in line and Vietnam already locked into higher rates, India's final number could set a new benchmark for what winning a trade negotiation in Trump's world looks like. Investors are watching closelynot just for tariff numbers, but for what sectors each side puts on the table to get there.