Washington: As the latest round of tariff escalations unsettles India-US trade ties, US Treasury Secretary Scott Bessent has struck a note of cautious optimism, underlining that despite sharp disagreements, the world’s largest democracy and the world’s largest economy are bound to find common ground.
Speaking to Fox Business after Washington imposed an additional 25 per cent penalty on Indian exports on top of earlier duties over New Delhi’s continued purchase of Russian crude and defence hardware, Bessent acknowledged the friction but remained hopeful. “I do think India is the world’s largest democracy, the US is the world’s largest economy. At the end of the day, we will come together,” he said.
Bessent admitted, however, that trade negotiations had been slower than expected. “The Indians came in early after Liberation Day to start negotiating on tariffs and we still don’t have a deal. I thought we would have one by May or June. India has taken a performative approach, dragging out the talks, all while benefitting from discounted Russian crude,” he remarked.
Even so, he pointed out that President Donald Trump and Prime Minister Narendra Modi share a “very good rapport at the top level”, suggesting that the relationship is bigger than its current trade standoff. “This is a complicated relationship, and it’s not just about Russian oil,” he stressed.
Bessent reiterated Washington’s longstanding concern over the trade imbalance, noting that the US runs a large deficit with India. “When there is a schism in trade relations, the deficit country is at an advantage and the surplus country should worry. The Indians are selling to us, but they maintain very high tariffs while we run a very large deficit with them,” he said.
On speculation that India might shift to rupee-based trade settlements, the Treasury Secretary dismissed the possibility of the rupee challenging the dollar. “There are a lot of things I worry about. The rupee becoming the reserve currency isn’t one of them. It is at an all-time low against the US dollar,” he said.
Meanwhile, in New Delhi, the Modi government has taken a defiant stance. Prime Minister Modi has reportedly refused four calls from President Trump in recent weeks, according to German daily Frankfurter Allgemeine Zeitung (FAZ), reflecting both the depth of his anger and his determination not to compromise on India’s interests particularly the protection of farmers.
While Washington sees tariffs as a tool to pressure New Delhi on energy trade with Russia, India maintains that its energy security cannot be compromised and insists it will chart its own course. The unfolding tussle underscores the fragility of trade diplomacy but also highlights the resilience of a partnership shaped by shared strategic and democratic interests.