Indian officials are hoping to secure a trade deal with US President Donald Trump at a lower tariff rate than he had agreed with Indonesia as New Delhi races to meet an August 1 deadline, Bloomberg has reported.

Trump said on Tuesday that the US will impose a tariff rate of 19 per cent on imports from Indonesia, down from 32 per cent, and will be able to ship American goods to the country tariff-free.

The US president later told reporters that the India deal would be “along that same line” and “we’re going to have access into India”.

“We’re very close to a deal with India, where they open it up,” Trump said in the Oval Office on Wednesday while talking to reporters during a bilateral meeting with Crown Prince and Prime Minister of Bahrain Salman bin Hamad Al Khalifa.

“We’ve made deals with a lot of great places… We have another one coming up, maybe with India. I don’t know, we’re in negotiation. When I send out a letter, that’s a deal,” Trump said.

India is seeking more favourable rates than Indonesia and the 20 per cent tariff imposed on Vietnam, officials in New Delhi said.

The US and India are working toward a deal that would reduce tariffs to below 20 per cent, with a team currently in Washington to advance the talks, hoping for a tariff that would give it a competitive advantage against its peers in the region, officials said.

India believes the US doesn’t view it as a trans-shipment hub like Vietnam and other Southeast Asian nations, and negotiations so far suggest India’s tariff rate would be better than those countries, one of the people said.

India’s ministry of commerce and industry didn’t immediately respond to an email seeking further comment.

Soumya Kanti Ghosh, chief economist of SBI, the largest government-owned lender, and a member of the prime minister’s Economic Advisory Council, said the negotiating team would be hoping to bring the tariff down to below 10 per cent.

“And in the bargain, the US will expect significant concessions for its goods when they decide to enter India,” he said. While India is unwilling to open up the agricultural and dairy sectors, it may give concessions in non-agricultural sectors, he said.

India has already proposed to reduce tariffs on American industrial goods to zero, provided the United States does the same. India has also offered greater market access to some American farm products and has raised the possibility of buying more Boeing planes.

Aside from Indonesia, Trump has also announced trade deals with the UK and Vietnam, and a truce with China. Trump said Jakarta had agreed to purchase $15 billion in US energy and $4.5 billion worth of agricultural products, along with Boeing planes.

Indonesia’s president said US counterpart Donald Trump was a “tough negotiator” with the deal being among only a handful reached so far by the Trump administration ahead of an August 1 deadline for negotiations, but no details were immediately provided by Indonesia, Southeast Asia’s largest economy and a member of the G20.

The latest development shows that tariff rates are gravitating toward 15-20 per cent, a range that Trump himself has indicated as his preferred level, said Brian Tan, Barclays Plc’s economist in Singapore.

South America FTA

The next round of negotiations for the proposed comprehensive free trade agreements between India and two South American countries — Chile and Peru — will be held in August, an official said on Wednesday.

While India-Chile will hold the second round of talks, India-Peru will have the eighth round of negotiations, the official said.