Tensions between Washington and New Delhi escalated this week after U.S. President Donald Trump imposed a 50% tariff on Indian goods in response to New Delhi’s continued purchases of discounted Russian oil. Despite the growing friction, Treasury Secretary Scott Bessent struck an optimistic note, emphasizing the importance of the U.S.-India relationship and expressing hope for eventual cooperation.
Trump’s Tariff Measures
The new levies include an additional 25% duty, raising overall tariffs on Indian exports to 50%. Trump had first announced reciprocal tariffs of 25% on India earlier this month, alongside similar measures targeting around 70 other countries. The administration has argued that India’s ongoing oil imports from Russia undermine U.S. sanctions, prompting the punitive trade measures. Trump criticized both India and Russia, calling their economies “dead” and accusing India of maintaining excessively high tariffs on U.S. goods.
India’s Response
In response, India has launched outreach programs across 40 global markets—including the UK, Japan, Germany, Canada, and Australia—aimed at boosting its textile exports and mitigating the impact of U.S. tariffs. Indian officials have sought to diversify trade opportunities while continuing negotiations with Washington, though progress has been slow. Treasury Secretary Bessent noted that India had engaged early in tariff talks but described much of its negotiating stance as “performative.”
U.S. Treasury’s Position
Speaking to Fox Business, Bessent reiterated that the U.S. sees India as a key partner. “I do think India is the world’s largest democracy and the U.S. is the world’s largest economy. I think at the end of the day we will come together,” he said. He added that despite the disputes, President Trump and Prime Minister Modi “have a very good relationship.” On questions about the rupee becoming a global reserve currency, Bessent dismissed the idea, pointing out the currency is near an “all-time low.”
Conclusion
The 50% tariffs imposed by Washington mark a significant escalation in U.S.-India trade tensions, with the dispute centered on India’s Russian oil imports. While both governments emphasize the strength of their bilateral ties, the lack of progress in negotiations and India’s counteroffensive measures suggest challenges lie ahead. The outcome will determine how two of the world’s largest democracies navigate a complex intersection of trade, energy, and geopolitics.