‘Not just about Russian oil’: US issues BIG statement amid tariff tussle with India, blames slow pace of…

The new 50 per cent tariff on Indian goods, which came into effect, has doubled the earlier 25 per cent duty imposed on August 7. The US has justified this move as a response to India’s imports of Russian crude oil and military equipment.

US Treasury Secretary Scott Bessent said on Wednesday that the United States and India will eventually find a way to work through their differences, despite President Donald Trump’s decision to impose a 50 per cent tariff on Indian goods. Speaking to Fox News, he explained that the trade tensions were not only about India buying Russian oil.

Bessent called the relationship between the two countries “complicated” but said he believes they will come to an agreement eventually. He also mentioned that while President Trump and Prime Minister Modi share a good personal relationship, trade talks have been slow. According to him, negotiations began soon after Liberation Day, and he had expected a deal by May or June, but progress stalled. He added that India’s profits from buying Russian crude oil have added another layer to the ongoing issues.

“This is a complicated relationship. President Trump and Prime Minister Modi have a very good relationship at that level. It’s not just over the Russian oil,” Bessent said.

“The Indians came in early after Liberation Day to start negotiating on tariffs and we still don’t have a deal. I thought we would have a deal in May or 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. There’s many levels going on here.”

The new 50 per cent tariff on Indian goods, which came into effect on August 27, has doubled the earlier 25 per cent duty imposed on August 7. The US has justified this move as a response to India’s imports of Russian crude oil and military equipment.

Talking about the trade talks, Bessent said that there is still no trade deal between the two countries. He noted that India’s approach to the negotiations has been slow and cautious, even though a deal was expected by May or June.

He added that India’s continued profit from Russian oil purchases has further complicated the situation. However, Bessent pointed out that despite the trade tensions, President Trump and Prime Minister Modi share a very good personal rapport, and the overall relationship, while complicated, remains strong.

How will the US tariffs affect India?

The new US tariffs are likely to hit Indian exports worth around USD 60.2 billion, according to the Global Trade Research Initiative (GTRI). Key labour-heavy industries such as textiles, gems and jewellery, shrimp, carpets, and furniture could see their exports drop by as much as 70 per cent, putting the livelihoods of millions of workers at risk.

The issue stems largely from India’s purchase of discounted Russian oil. After Western sanctions on Russia in 2022, New Delhi increased its imports, and by mid-2024, Russia was supplying 41 per cent of India’s oil needs. In July 2024 alone, India imported over 2 million barrels per day from Russia.

India has made it clear that it will continue to buy oil from the most affordable sources, despite US pressure. New Delhi has also criticised the West for what it calls double standards, pointing out that many Western nations still trade with Russia.

Prime Minister Narendra Modi, addressing the issue, said India will not bow to external pressure and will always protect the interests of farmers, small industries, and local businesses. He urged people to support swadeshi (home-grown) goods to strengthen the domestic economy.

HIGHLIGHTS

1. Scott Bessent, US Treasury Secretary, said the US and India will eventually find common ground despite the tariff dispute.
2. He clarified that the trade tensions are about more than just Russian oil imports.
3. The new tariff took effect on August 27, doubling the duty on Indian goods from 25% to 50%.
4. The US explained the tariff hike as a response to India’s imports of Russian crude oil and military equipment.