The recent trade situation between the US and India, spotlighted by the doubling of US tariffs on Indian goods to 50%, has brought considerable tension yet cautious optimism for a resolution.

US Treasury Secretary Scott Bessent acknowledged the complexity of the relationship, including tariff discussions and disputes over India’s purchase of Russian oil, but remains hopeful that both nations will "come together" despite these challenges.

Bessent highlighted that the US, as the deficit country in the trade relationship with India, holds leverage in negotiations. He noted that India entered tariff talks soon after Trump’s April 2, 2025 "Liberation Day" announcement intending to impose tariffs on various nations, expecting an agreement by May or June.

However, the negotiations have stalled with India’s approach described as "performative" and complicated by India’s continued purchase of discounted Russian crude oil, which the US sees as profiteering.

President Trump initially imposed a 25% tariff on Indian goods on August 7, 2025, with an additional 25% tariff scheduled for August 27, 2025, specifically linked to India’s purchase of Russian oil, making the total tariff 50%.

This move represents one of the steepest tariffs imposed by the US, affecting a wide range of Indian exports including garments, gems, jewellery, and footwear. Certain goods such as steel, aluminium, humanitarian donations, and informational materials are exempt. Importantly, shipments loaded before August 27 and cleared by September 17 will not face the additional penalty.

Despite these tariffs, Bessent emphasised the strong personal rapport between Prime Minister Narendra Modi and President Trump as a key element of the bilateral relationship. He reiterated India’s status as the world’s largest democracy and the US as the largest economy, expressing confidence that ultimately India and the US will resolve their differences and reach trade agreements.

India’s position is further complicated by its strategic need for Russian oil, which offers significant cost savings compared to global benchmarks, as well as longstanding defence and political ties with Russia. This complicates New Delhi’s ability to fully comply with US demands. Both sides have kept communication channels open, with ongoing talks on trade, energy security, and critical minerals.

The US tariffs have intensified economic friction, there remains a shared interest at the highest political levels to navigate these issues pragmatically and preserve the strategic partnership. Bessent’s remarks reflect an expectation of eventual agreement despite current "complicated" relations and tariffs doubling to a punitive 50% due to oil disputes and broader trade concerns.

Based On ANI Report