India-US Tariff Issue: Bessent Optimistic

New York/Washington, Aug 27 (PTI) Describing the India-US relationship as "very complicated", US Treasury Secretary Scott Bessent on Wednesday hoped that "at the end of the day, we will come together."

"This is a very complicated relationship. President (Donald) Trump or Prime Minister (Narendra) Modi have very good relationships at that level. And it's not just over the Russian oil," Bessent said in an interview with Fox Business.

Stressing that India is the world's largest democracy and the US is the world's largest economy, he said, “I think at the end of the day, we will come together."

His comments came hours after the additional 25 per cent tariff imposed by Trump on India for its purchases of Russian oil came into effect, bringing the total amount of levies imposed on New Delhi to 50 per cent.

On Monday, Prime Minister Modi asserted he can't compromise on the interests of farmers, cattle-rearers, small-scale industries, cautioning "pressure on us may increase, but we will bear it".

Bessent said that he had thought the trade deal with India would be among the first ones that Washington would sign, but that has not happened.

“The Indians came in very early after Liberation Day to start negotiating on tariffs, and we still don't have a deal,” he said, referring to April 2, 2025, when Trump had announced Washington would impose sweeping tariffs on nations around the world.

Bessent added that he had thought that “we would have a deal” with India in May and June. “I thought India could be one of the earlier deals. And they kind of tapped us along in terms of the negotiations. And then there is also the aspect of the Russian crude purchases, which they've been profiteering on. So there are many levels going on here.”

He said, "I think at the end of the day, we will come together."

"I think a lot of it by the Indians has been performative but….I've said this all along during the tariff negotiations, the US is the deficit country,” he said.

He said when there is a “schism” in trade relations, the deficit country is at an advantage. “It's the surplus country that should worry. So the Indians are selling to us, they have very high tariffs, and we have a very large deficit with them.”

When asked if he worries that India is going to set trade in the rupee and will trade with the rupee currency with the BRICS nations instead of the US dollar, Bessent said, “There are a lot of things I worry about. The rupee becoming a reserve currency isn't one of them. I think the rupee is near an all-time low versus the US dollar.”

He further said that the US could use a “more fulsome" assist from its European partners, as President Trump is trying to end the war in Ukraine that never would have started if he had been President.

“Our European allies need to step up. I don't see them threatening the tariffs on the Indians. As a matter of fact, they're the ones buying the refined products that's made from the Russian oil.”

Trump had announced reciprocal tariffs of 25 per cent on India that came into effect on August 7, when tariffs on about 70 other nations also kicked in. On August 7, the US president announced doubling tariffs on Indian goods to 50 per cent for India's purchases of Russian crude oil, but gave a 21-day window to negotiate an agreement.