discord-resolution-with-the-us-still-on-the-cards-govt-sources

Government sources have been allaying exporters’ fears over hiked tariffs by the US on Indian goods that came into effect on August 27, saying the impact won’t be severe even while the Centre continues to make efforts to resolve the ongoing discord with Trump’s administration. 

US President Donald Trump had imposed an additional 25 per cent tariffs on exports from India to the US as a punitive measure against India’s continued purchases of Russian oil, which Trump claimed was used to fund the war in Ukraine. In April this year, he had increased tariffs on Indian goods to 25 per cent. 

With the total tariffs on Indian products now reaching 50 per cent, exports worth over $60 billion are now in the array of those facing hiked duties. 

After five rounds of talks between India and the US that failed, the sixth round comprising a delegation visit from Washington to New Delhi now stands cancelled. However, while India works to expand its exports basket, it has been open to dialogue with the US to resolve what it calls a temporary crisis in an otherwise long-term relationship between the two countries. 

 

Also Read: Can a reunited dragon and elephant reshape the Asian economy?

In an interview to Fox News yesterday, US Treasury Secretary, Scott Bessent, expressed confidence in the US and India eventually “coming together”.

"I do think India's the world's largest democracy, the US is the world's largest economy. I think at the end of the day we will come together,” he said. 

Talking about the “very good rapport” between Prime Minister Narendra Modi and Trump, Bessent, like others in the Trump Cabinet, reiterated the stance on Russian oil being the bone of contention between India and the US.

In their trade relationship, he said, “the US is the deficit country” that is at an “advantage”.

“When there is a schism in trade relations, the deficit country's at an advantage. It's the surplus country that should worry. So, the Indians are selling to us. They have very high tariffs and we have a very large deficit with them," the Treasury Secretary said.

Meanwhile, back home, Prime Minister Modi’s pitch for adopting locally-made goods has been growing louder. During his Independence Day speech to the nation, the Prime Minister had announced an incoming GST rejig to ease the economy, while vowing to stand by the Indian farmers, saying he would “never compromise” their interests.