Even as the additional 25 per cent tariff imposed on India by US President Donald Trump came into effect on Wednesday, bringing the total amount of levies imposed on New Delhi to 50 per cent, a top Trump aide expressed confidence that India and the US will come together to find a middle-ground as Prime Minister Narendra Modi and Trump have a "very good rapport at the top level,"—a sentiment that was echoed by Indian government sources as well.
According to US Treasury Secretary Scott Bessent, there are "many layers" to the tariff situation. In an interview with Fox News, he said, "This is a complicated relationship. President Trump and Prime Minister Modi have a very good rapport at the top level, but it is not just about Russian oil."
He said India came in early after Liberation Day to begin negotiating on tariffs, yet there still isn't a deal, and added that he had expected an agreement by May or June, as he thought that India would be one of the first countries to strike a deal with the US. "Instead, they have dragged out the negotiations. On top of that, there is the issue of Russian crude purchases, which they have been profiting from.”
Bessent, who had earlier called India a "bit recalcitrant" on trade negotiations and a tariff abuser, further said, "India is the world’s largest democracy, and the US is the world’s largest economy. At the end of the day, I believe the two countries will come together.”
"I think a lot of it by the Indians has been performative but, I have said this all along during the tariff negotiations, the US is the deficit country."
Bessent had earlier warned that the Trump administration may increase secondary tariffs on India if it continues to procure Russian crude oil.
Communication channels open, say govt sources
Meanwhile, government sources in India clarified that communication channels remain open between India and the US and efforts will continue to resolve the ongoing tariff issue.
"The impact (of the tariffs) is unlikely to be as severe as feared given the diversified nature of Indian exports," the sources said, reported PTI.
The sources further said there is no cause for panic as far as exporters are concerned, stressing "it is a temporary phase in a long-term relationship" between India and the US.
The US Department of Homeland Security, in a draft order published on Monday, said the increased levies would hit Indian products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am eastern daylight time on August 27, 2025.
