27 August 2025 – India and the US held a virtual 2+2 Intersessional Dialogue on August 25. The meeting came at a time when the Trump administration threatened to impose 50% tariffs on Indian goods. It was the first such high-level diplomatic dialogue, in which the two countries discussed furthering strategic cooperation. However, only two days after the talks, new tariffs were imposed by the US on Indian exports.
Defence and strategic cooperation
Despite the economic tensions, the main focus of the dialogue was defence cooperation. Officials from both sides agreed to pursue a new ten-year framework for the India-US Major Defense Partnership. The initiative builds on “COMPACT” (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology), which was launched during Prime Minister Narendra Modi’s recent visit to Washington.
According to India’s foreign ministry, the officials committed to “enhancing defence cooperation, signing a new ten-year framework… advancing defence industrial, science and technology cooperation, operational coordination, regional cooperation and information-sharing”.
Mineral and energy security
The discussions also covered critical minerals exploration and energy security. The two countries emphasised on diversifying supply chains to reduce dependence on China. India is set to host the Quad Leaders Summit soon, and in this context, the two countries reiterated their commitment to the objective of the Quad—a “safer, stronger and more prosperous Indo-Pacific”. India’s foreign secretary Vikram Misri also said critical minerals cooperation is a “key priority” for both India and Japan in the Quad framework.
Shadow of tariff dispute
The dialogue took place against the backdrop of rising trade tensions. On August 27, the Trump administration imposed an additional 25% duty on Indian goods, taking the total duty on most Indian exports to 50%. The US Department of Homeland Security said the punitive tariffs were imposed because of India’s continued import of Russian oil, which the US considers a threat to its national security.
India has called the measures “unfair, unjustified and unreasonable”. Prime Minister Narendra Modi said India will “keep increasing our strength to withstand” external pressure. The tariffs will impact India’s US exports worth about $87 billion, of which about 55% could be affected. Labour-intensive sectors such as textiles, seafood, gems and jewellery will be hit the hardest.
