• U.S. Treasury Secretary Scott Bessent states negotiations with India are "very close" and expects an eventual agreement.
  • The optimism comes despite a new 25% secondary tariff on India, announced in response to its purchases of Russian oil.
  • President Trump confirmed the tariffs will take effect as scheduled, marking a significant low in bilateral relations.

U.S. Treasury Secretary Scott Bessent struck a notably optimistic tone on the prospects for a trade deal with India, telling an audience on Thursday that the two nations are “very close” and that he believes an agreement will ultimately be reached. This confidence is juxtaposed against a recent sharp deterioration in relations, following the U.S. announcement of a new 25% secondary tariff on Indian goods.

The tariff decision, confirmed by President Trump to take effect without delay, is a direct response to India’s continued substantial imports of Russian oil, which the administration views as undermining international sanctions pressure on Russia. The move has been described by people familiar with the negotiations as a significant low point, creating immediate friction even as diplomatic channels remain open.

Despite the new punitive measure, Secretary Bessent characterized the ongoing trade talks as smoother than negotiations with other international partners. He suggested that the underlying economic alignment between the two countries would eventually overcome current geopolitical tensions. Officials working on the deal, who asked not to be identified because the discussions are private, indicated that talks are ongoing but have undoubtedly been complicated by the tariff announcement.

The Treasury Department did not immediately respond to a request for further comment on the timeline for a potential agreement. The imposition of tariffs could lead to higher costs for U.S. businesses and consumers importing affected Indian goods, while Indian exporters face the risk of reduced access to a key market.

This approach is consistent with the administration’s broader trade strategy, which has emphasized negotiation strength and a willingness to use tariffs as a tool for achieving foreign policy objectives. The situation remains fluid, with industry groups already lobbying the White House for relief. While Bessent’s comments point toward a desire for compromise, the path forward is contingent on navigating the complex interplay of trade, energy policy, and global sanctions enforcement.