The ongoing trade dispute between India and the United States took a new turn after US Treasury Secretary Scott Bessent described India as being “a bit recalcitrant” in its trade negotiations. Speaking to Fox Business Network’s Kudlow programme on Tuesday (local time), Bessent stated that while there are still significant deals pending globally, he is optimistic that a conclusion could be reached with India by October.

“There are big trade deals that aren't done and aren't agreed. Switzerland is still around; India has been a bit recalcitrant. I think we have agreed on substantial terms with all the substantial countries,” Bessent said, expressing cautious optimism. “That’s aspirational. I think we’re in a good position,” he added.

The comments come days after US President Donald Trump announced an additional 25% tariff on Indian goods, on top of an earlier 25% levy that took effect from August 7. Trump has justified the tariffs by pointing to India’s purchase of Russian oil and weaponry, claiming that such actions are indirectly supporting the war in Ukraine. The additional duties, formalised through an executive order signed on August 6, are set to take effect from August 27.

The Indian government has strongly condemned the move, describing the tariffs as “unjustified and unreasonable”. In statements to Parliament and the media, officials have reiterated that India will take all necessary measures to safeguard its national interests and economic security. Prime Minister Narendra Modi has also personally assured that the government will protect the interests of farmers and fishermen, sectors that could be significantly impacted by the tariffs.

This latest escalation adds further strain to an already complicated trade relationship between New Delhi and Washington. The two countries had been working towards a Bilateral Trade Agreement (BTA), with initial talks showing promise earlier this year. However, the imposition of tariffs has slowed progress and injected new political sensitivities into the discussions.

The dispute is also unfolding against the backdrop of significant geopolitical tensions, as India seeks to balance its strategic partnerships with both Russia and the US. While Washington is pressing New Delhi to scale back its economic engagement with Moscow, India has maintained that its decisions are guided by strategic autonomy and national security considerations.

Looking ahead, diplomatic attention will turn to the upcoming 80th session of the United Nations General Assembly (UNGA) in New York, which begins on September 9. The high-level General Debate is scheduled from September 23 to 29, with PM Modi expected to address the session on the morning of September 26. President Trump’s address is provisionally set for September 23, marking his first appearance at the UNGA podium in his second term.

Sources suggest that Modi and Trump could meet on the sidelines of the UNGA to discuss trade, security, and other bilateral issues. Such a meeting could prove critical in determining whether the two leaders can find common ground and break the current stalemate in negotiations.

For now, the situation remains fluid. The provisional UNGA speaker list is subject to change, and neither side has officially confirmed the bilateral meeting. However, the stakes are high, as the trade impasse has the potential to affect a range of sectors from agriculture to manufacturing, as well as the broader strategic partnership between the two nations.

The coming weeks will likely determine whether India and the US can resolve their differences diplomatically or whether this tariff war will escalate further, potentially impacting global markets and regional alliances.

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