There is a lot of anxiety and cautious hope for a settlement in the recent trade situation between the US and India, which was highlighted by the US increasing its tariffs on Indian imports to 50%.
US Treasury Secretary Scott Bessent expressed optimism that both countries will “come together” in spite of the relationship’s complexity, which includes tariff talks and disagreements over India’s purchase of Russian oil.
Bessent emphasised that the US has negotiating leverage because it is the trading partner with India with the deficit. He pointed out that shortly after Trump’s “Liberation Day” declaration on April 2, 2025, that he intended to apply tariffs on a number of countries, India initiated tariff negotiations with the expectation of reaching an agreement by May or June.
The US views India’s ongoing purchases of discounted Russian crude oil as profiteering, and the negotiations have stopped despite India’s “performative” attitude.
In connection with India’s purchase of Russian oil, President Trump first levied a 25% tariff on Indian imports on August 7, 2025, and then on August 27, 2025, he added another 25% charge, bringing the total tariff to 50%.
This action, which affects a variety of Indian products such as clothing, jewellery, gems, and footwear, is one of the highest levies the US has ever levied. Some items are excluded, including informational publications, steel, aluminium, and gifts to charities. Crucially, the extra penalty won’t apply to shipments that are loaded before August 27 and cleared before September 17.
Notwithstanding these tariffs, Bessent underlined that a crucial component of the two countries’ relationship is the close personal bond between President Trump and Prime Minister Narendra Modi. He reaffirmed that the US is the largest economy and India is the largest democracy in the world, and he expressed confidence that the two countries will eventually work out their differences and sign trade deals.
Long-standing defence and political ties with Russia, as well as India’s strategic need for Russian oil—which offers substantial cost reductions when compared to international standards—complicate the situation even more. This makes it more difficult for New Delhi to completely abide by US requests. With continuing discussions on trade, energy security, and vital minerals, both parties have maintained open lines of communication.
Economic friction has increased due to US tariffs, but there is still a desire at the highest political levels to resolve these problems amicably and maintain the strategic alliance. Despite the current “complicated” relations and tariffs that have doubled to a punishing 50% due to oil conflicts and wider trade worries, Bessent’s comments indicate an expectation of an eventual compromise.
