US Treasury Secretary Scott Bessent Expresses Frustration with India's Slow Progress in Trade Negotiations.

US Treasury Secretary Scott Bessent expressed frustration with India's approach to trade negotiations, citing President Donald Trump's dissatisfaction. Bessent accused India of refining and reselling Russian oil, calling it "not a great global actor." The US has imposed a 25% tariff on all Indian imports starting August 1, and analysts view this as a pressure tactic to secure favorable trade terms. India is reviewing the impact of the new tariff measures and will take necessary steps to protect its national interests.

US Treasury Secretary Scott Bessent has expressed frustration with India's approach to trade negotiations, citing President Donald Trump's dissatisfaction. Bessent accused India of refining and reselling Russian oil, labeling the country "not a great global actor." The US has imposed a 25% tariff on all Indian imports starting August 1, and analysts view this as a pressure tactic to secure favorable trade terms. India is reviewing the impact of the new tariff measures and will take necessary steps to protect its national interests.

The tariffs, announced by Trump, come as part of a broader strategy to pressure New Delhi into agreeing to US trade terms. Trump's administration has been negotiating with India for an interim trade deal but has so far been unable to reach an agreement. The US has also threatened unspecified penalties for India's continued purchases of Russian oil and military hardware.

India, however, has maintained its stance, refusing to yield on key agricultural concerns. The country is currently reviewing the impact of the new tariff measures and is prepared to take necessary steps to protect its national interests. A government statement in response to Trump's tariff announcement said India will take all necessary steps to protect the interests of farmers, MSMEs, and entrepreneurs.

Analysts suggest that the tariffs may have a limited impact on overall Indian exports. Bloomberg News reported that about 10% of total Indian exports would be affected in July to September if the tariff exceeds 25%. Despite the short-term impact, India is not ready to compromise on its core concerns, refusing to give full access to the US dairy and farm products.

India's negotiation strategy appears to be driven by its central role in American strategy to contain China. The US cannot afford to permanently alienate India, especially when it is still locked in stretched trade talks with China. India is also pursuing alternative trade deals with the UK, the EU, and several other countries while retaining its strong link with the US.

The tariffs will be a short-term challenge for India, but both countries remain focused on a deal. Madhavi Arora, an economist at Emkay Global, told Reuters that the negotiations seem to have broken down but are not over yet. Garima Kapoor, an economist at Elara Securities, expects a deal by the end of Q3 but anticipates a kneejerk reaction in Indian asset classes in the near term.

References:
[1] https://www.business-standard.com/world-news/trump-team-frustrated-with-india-over-trade-says-us-treasury-secy-125073101787_1.html
[2] https://m.economictimes.com/news/economy/foreign-trade/trumps-india-tactics-pressure-politics-and-power-games/articleshow/123014719.cms