India-US commerce relations: The day a steep 50% tariff on Indian imports to the USA took impact (August 27), U.S. Treasury Secretary Scott Bessent made two placing statements that mirror each the financial friction and enduring strategic cooperation between the 2 nations.
Talking with Fox Information, he scoffed on the concept of the Indian rupee changing the U.S. greenback in international commerce, stating, “There are numerous issues I fear about. The rupee turning into a reserve foreign money will not be certainly one of them. The rupee is at an all-time low towards the U.S. greenback.”
Fox Information Anchor: Do you are concerned that India will set commerce within the rupee and never the greenback? (Laughs)
US Treasury Secretary: There are numerous issues I fear about. The rupee turning into a reserve foreign money will not be certainly one of them. The rupee is at an all time low towards the US greenback pic.twitter.com/4atw3LgdFd
— Shashank Mattoo (@MattooShashank) August 27, 2025
On the similar time, commenting on the broader state of bilateral ties, he referred to as the India-US relationship “sophisticated” however added, “On the finish of the day, we are going to come collectively.”
‘America has the benefit in commerce talks with India,’ says U.S. Treasury Secretary Scott Bessent pic.twitter.com/xudyzhm8jz
— Shashank Mattoo (@MattooShashank) August 27, 2025
‘The Rupee Is At An All-Time Low’
The interview took a sarcastic flip when the anchor mockingly requested Bessent, “Do you are concerned that India will set commerce within the rupee and never the greenback?”
He responded with laughter and dismissiveness. “There are numerous issues I fear about. The rupee turning into a reserve foreign money will not be certainly one of them. The rupee is at an all time low towards the U.S. greenback.”
Bessent’s public dismissal comes within the wake of rising discussions in BRICS about lowering dependence on the U.S. greenback and exploring various currencies for commerce. Whereas India has expressed curiosity in increasing the rupee’s international position, the U.S. treasury secretary’s remarks sign that Washington doesn’t view India’s foreign money as a severe competitor on the worldwide monetary stage.
On the similar time, India is bracing for the affect of the brand new 50% US tariffs. In response, New Delhi has launched an expansive counteroffensive technique aimed toward safeguarding its exports.
Officers have introduced outreach campaigns throughout 40 international markets, focusing on main economies like the UK, Japan, South Korea, Germany, France, Italy, Spain, Canada, Mexico, Russia and Australia with a concentrate on bolstering textile exports (one of many sectors anticipated to be hardest hit by the tariff spike).
U.S. President Donald Trump added gasoline to the stress by publicly mocking India’s partnership with Russia.
“I don’t care what India does with Russia. They’ll take their lifeless economies down collectively, for all I care,” he mentioned justifying the tariff hike with accusations of India’s excessive commerce limitations and restricted commerce with the USA.
Closely reliant on U.S. markets, India’s gems, jewelry and textile industries are prone to bear the brunt of the brand new tariffs.
Commerce officers in New Delhi say the door for dialogue stays open. A Reuters report cited authorities sources saying that India remains to be hopeful of a shift in Washington’s place.
‘…However We Will Come Collectively’
Throughout his Fox Enterprise look, Bessent elaborated on the broader state of bilateral relations, describing the U.S.-India equation as “sophisticated”. He referred to the non-public rapport between PM Modi and President Trump however admitted to frustrations over stalled negotiations.
“President Trump and Prime Minister Modi have an excellent relationship. It’s not simply over the Russian oil. The Indians got here in early after Liberation Day to begin negotiating on tariffs and we nonetheless don’t have a deal,” he mentioned.
The treasury secretary expressed dismay over India’s continued buy of discounted Russian oil, accusing New Delhi of “profiteering”.
“There may be many ranges happening right here. I do assume India is the world’s largest democracy, and the USA is the world’s largest economic system. I believe on the finish of the day we are going to come collectively,” he added.
Anchor: India’s Overseas Minister mentioned the US can cease shopping for Indian refined oil if it has an issue with New Delhi shopping for Russian oil
US Treasury Secretary: Nicely, India is the world’s largest democracy and America is the world’s largest economic system. Ultimately we are going to come collectively pic.twitter.com/gydKmpyoaB
— Shashank Mattoo (@MattooShashank) August 27, 2025
Bessent described India’s behaviour throughout commerce talks as “performative”, blaming New Delhi’s alleged excessive tariffs and protectionist stance, particularly in agriculture and midsize automobile sectors, for the failure to succeed in a deal.
“I believed we’d have a deal in Could or June. I believed India could possibly be one of many earlier offers and so they type of tapped us alongside,” he mentioned.
He emphasised that the USA is a deficit nation, whereas India enjoys a commerce surplus, suggesting that New Delhi ought to be extra involved about escalating tensions.
“When there’s a schism in commerce relations, the deficit nation is . It’s the surplus nation that ought to fear. So, the Indians are promoting to us,” he mentioned.
A crew of U.S. commerce negotiators was scheduled to reach in India on August 25. Nonetheless, the go to was abruptly referred to as off after President Trump declared the 50% tariff charge on August 6. Commerce talks that started in February, quickly after Modi’s go to to Washington, had been anticipated to end in a deal by year-end. Whereas each side had signed phrases of reference (ToR) for a deal, India’s refusal to open its markets extra totally turned a roadblock.
Russian Oil At The Coronary heart Of It
The tariffs are extensively seen as a penalty for India’s large-scale imports of Russian crude, which have turn into a key sticking level. In August, Trump introduced the extra 25% tariff, atop an earlier 25% levy, straight linking the transfer to India’s oil purchases from Moscow. “They’ve been profiteering on it,” Bessent mentioned.
India has maintained that its choice to purchase Russian oil was made as a result of conventional suppliers diverting their exports to Europe. New Delhi additionally mentioned the USA had “actively inspired” India’s Russian oil imports to assist stabilise international power costs.
When Russia invaded Ukraine in February 2022, its share in India’s oil imports was beneath 2%. Since then, Russia has turn into India’s high crude provider, accounting for 35-40% of imports.
The Indian authorities continues to claim that its oil buy selections are dictated purely by financial and industrial issues. Officers clarified that Indian refiners have adopted the US-imposed value cap, relevant provided that Western delivery or insurance coverage companies are concerned.
Regardless of Washington’s escalating rhetoric, no such tariffs have been imposed on China, which is the most important purchaser of Russian oil. Bessent pressed for a extra unified Western entrance towards India’s crude imports.
China is ramping up purchases of Russian oil whereas Indian shopping for is slowing down, stories CNN
However the Trump administration remains to be refusing to put secondary tariffs on China for purchasing Russian power pic.twitter.com/2ojp4HLeiW
— Shashank Mattoo (@MattooShashank) August 27, 2025
“Our European allies have to step up. I don’t see them threatening the tariffs on the Indians. As a matter of reality, they’re those shopping for the refined merchandise that has created from the Russian oil,” he mentioned.
In keeping with him, solely Canada has proven readiness to affix the USA in making use of secondary tariffs on international locations shopping for oil from Russia.
Ongoing Diplomacy
Regardless of the heavy tariffs, officers from India’s Commerce Ministry mentioned strains of communication stay open. The ministry is in steady contact with business stakeholders to discover each possibility for relieving the affect of the tariffs. India hopes diplomatic efforts and outreach will assist revive talks and defend its export sectors.
Whereas the rupee could be at a report low and tariffs at a report excessive, India and the USA, two of the world’s greatest democracies and economies, proceed to stroll the tightrope of diplomacy, commerce and strategic convergence.