Amidst a backdrop of escalating trade tensions, the United States and India are reportedly making efforts to resolve their differences, according to U.S. Treasury Secretary Scott Bessent. Bessent acknowledged the complex nature of the relationship between the two countries but expressed optimism that they would "come together" at the end of the day. His comments come as new tariffs imposed by the U.S. on Indian goods took effect, raising concerns about the future of bilateral trade.

The new tariffs, which amount to a total of 50% on most Indian exports to the U.S., are a result of India's continued purchases of Russian crude oil, a move that has irked Washington. President Trump had initially announced reciprocal tariffs of 25% on India that came into effect on August 7, 2025, along with tariffs on about 70 other nations. Subsequently, the U.S. President announced doubling tariffs on Indian goods to 50% for India’s purchases of Russian crude oil, but gave a 21-day window to negotiate an agreement.

Despite the imposition of tariffs, communication channels between India and the U.S. remain open, signaling a willingness on both sides to find a resolution. Government sources in India have downplayed the potential impact of the tariffs, suggesting that the diversified nature of Indian exports would mitigate the effects. They also emphasized that the current situation is a temporary phase in a long-term relationship.

Bessent echoed this sentiment, highlighting the strong rapport between President Trump and Prime Minister Modi. He noted that India had been among the first countries to engage in trade negotiations with the U.S. after what he termed "Liberation Day" on April 2, 2025, when President Trump announced sweeping tariffs on nations around the world. However, he expressed disappointment that a deal has not yet been reached, stating he had expected an agreement by May or June.

The trade disputes between India and the U.S. center around several issues, including agricultural import duties and India's reluctance to halt its purchases of Russian oil. Bessent has also raised concerns about India "profiteering" from discounted Russian crude, which he says complicates U.S. efforts to tighten sanctions on Moscow.

India, on the other hand, has defended its decision to purchase Russian oil, citing national interests. Prime Minister Modi has asserted that he cannot compromise on the interests of farmers and small-scale industries, even if it means facing increased pressure.

Despite the challenges, both countries have incentives to resolve their trade differences. The U.S. is India's largest trading partner, and bilateral trade in goods stood at $131.8 billion in 2024-25. India, in turn, is a major market for U.S. goods and services.

To mitigate the impact of the U.S. tariffs, the Indian government is exploring various measures, including diversifying exports to new markets and providing support to exporters. The Commerce Ministry is holding consultations with stakeholders from various sectors to discuss ways to boost exports. India is also planning dedicated outreach programs in 40 countries, including the UK, Japan, and South Korea, to promote textile exports.

While the trade tensions between India and the U.S. pose challenges, both sides appear committed to finding a resolution. The open communication channels and the recognition of the long-term importance of the relationship provide a basis for optimism that the two countries can overcome their differences and forge a stronger economic partnership.