India is preparing to face higher U.S. tariffs — likely between 20% and 25% — on some of its exports as a temporary measure, as it holds off on fresh trade concessions ahead of Washington's August 1 deadline,

The stakes are high, with the United States and India counting on one another as indispensable partners in their competition with China.

The trade deal between India and the US remains unfinalized despite ongoing discussions. Key issues include US demands for greater access to Indian agricultural markets and tariffs on imports. Delays could negatively impact the Indian economy and stock market.

Indian shares were muted in early trades on Tuesday, with benchmark indexes near six-week lows, as concerns over a delay in signing a trade deal with the United States and sustained foreign outflows hurt demand.

Indian negotiators aim to secure trade agreements benefiting MSMEs, similar to the India-U.K. CETA provisions, in talks with the U.S. and EU.

The India-UK trade pact has incorporated a mutual recognition agreement framework to facilitate smoother entry of medical devices certified by domestic regulatory agencies into the British market, an official said on Tuesday.

The White House altered the plan at the last minute regarding India. Attempts are being made to persuade Trump to rethink his decision. However, at present, negotiators are returning to the negotiation table to resume discussions and, if necessary, completely restructure the agreement.

India's equity benchmarks were set for a muted open on Tuesday amid caution over a delay in interim trade deal with the United States, sustained foreign outflows and weak earnings.