US Treasury Secretary mocks Indian rupee, says it can't beat dollar

As trade tensions escalated with the US imposing steep tariffs on Indian exports earlier this week, its officials have now taken a dismissive stance towards India's economic strategies, mocking the Indian rupee's potential as a global reserve currency and its trade policies. The Trump administration's tariffs, which include 50% reciprocal tariffs on a range of Indian goods, have significantly strained India's labour-intensive sectors like textiles, gems, and jewellery. The tariffs will make Indian products expensive in the US for consumers.

These measures have intensified bilateral frictions, prompting sharp rhetoric from US leadership.

US Treasury Secretary Scott Bessent downplayed the Indian rupee's prospects as a global currency. When asked by the Fox News anchor, "Do you worry that India will set trade in the rupee and not the dollar?" Bessent responded, "There are a lot of things I worry about. The rupee becoming a reserve currency is not one of them."

Bessant further noted that the Indian currency is currently near an "all-time low", underscoring the dollar's continued dominance in global trade.

Notably, the Indian rupee hit a record low against the US dollar on Friday, dropping to 87.965.

Bessent also described the US-India relationship as "very complicated" but remained optimistic about future collaboration, citing the strong personal rapport between President Trump and Prime Minister Modi.

"PM Modi and Trump have a very good relationship at that level," he said, adding, "India is the world's largest democracy and the US is the world's largest economy. I think at the end of the day we will come together."

However, he criticised India's purchase of discounted Russian crude oil, calling its stance in trade negotiations "performative". Bessent noted that while talks began shortly after Inauguration Day, a comprehensive deal has yet to materialise.

President Trump had also on July 31 mocked India's economy over its trade trade ties with Russia. "I don't care what India does with Russia. They can take their dead economies down together, for all I care," he said, pointing to India's high tariffs and limited trade reciprocity with the US.

However, experts think otherwise. American economist Richard Wolff said that the US is acting like the "world's tough guy" against India, but is only shooting itself in the foot, as it is pushing the Brics to be an economic alternative to the West.

"India is now, according to the UN, the largest country on earth. The US telling India what to do is like a mouse hitting his fist to an elephant," he said.

In response to US tariffs, India has launched a robust counteroffensive to mitigate the tariff impact, initiating outreach programs across 40 key global markets, including the UK, Japan, South Korea, Germany, France, Italy, Spain, Canada, Mexico, Russia, and Australia. These efforts focus on boosting textile exports and diversifying trade partnerships to offset economic challenges.

Despite the strained relations, trade negotiations persist. Indian officials, as reported by Reuters, remain hopeful that the US may reconsider its tariff stance in the coming days.

- Ends

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