CHENNAI: The United States finds India a “bit recalcitrant” in trade talks. However, it hopes to wrap up trade negotiations by October. Experts are not happy with the choice of the word that portrays the US in a position of authority and India as an obstacle. They also find US CPI inflation numbers of July a blip before the reciprocal tariff effect starts in August. US Treasury Secretary Scott Bessent on Tuesday called India ‘recalcitrant’ while responding to a query by Fox Business Network on trade talks. “I think we are in a good position. The big trade deals that aren’t done or aren’t agreed – Switzerland is still around, India has been a bit recalcitrant,” he said. On closing the deals by October, he said: “That’s aspirational, but I think we are in a good position… I think we can be, we will have agreed on substantial terms with all the substantial countries.” Reacting to the comment, GTRI said: “calling India “recalcitrant” suggests the US sees itself as the generous party and India as the obstacle. Truth may be just the opposite. “Though there’s been no official statement from either side, it’s understood that negotiators had broadly settled the deal’s terms—until the US leadership pushed for additional concessions from India. This shifted the balance toward what many saw as a “one side gives, the other takes” deal,” said Ajay Srivastava of GTRI. “India’s position should be clear: it will negotiate seriously, but only for a fair, balanced agreement that respects red lines—on agriculture, generics, digital rules, and procurement—rather than capitulate under duress,” he added. Meanwhile, the US inflation data for July came lower than expected at 2.7 per cent, which was the same as in June. However, the core inflation rose to a five-month high. “July’s CPI held at 2.7 per cent, below expectations, strengthening the case for a Fed rate cut. However, August’s new tariffs could revive inflation pressures, making the Fed’s balancing act between growth and stability more complex in the coming months,” said Ajay Kedia, MD, Kedia Commodities. According to GTRI, US retail inflation is already visible, with annual CPI rising from 2.4 per cent in May to 2.7 per cent in June and holding there in July. “Meanwhile core inflation—which excludes food and energy—has climbed to 3.1 per cent, the highest in five months. While higher tariffs are raising the cost of imported goods and these increases are already feeding into retail prices, the full impact on industrial products will take a few months to show because of the lag between import, processing, and final sale. As these higher input costs work through supply chains, they will further fuel inflation, add to pressure on US manufacturers, and make it harder for the Federal Reserve to keep prices in check, said GTRI. Moreover, the basic tariffs of 10 per cent were in place in July and China too was given a 90-day relief from the reciprocal tariffs. This has also helped inflation from shooting up.
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