Ask Onix
India disputes US account of stalled trade negotiations
India has dismissed assertions by US Commerce Secretary Howard Lutnick that Prime Minister Narendra Modi's failure to call President Donald Trump derailed a bilateral trade agreement. New Delhi called the characterization of talks "not accurate" on Friday, emphasizing ongoing negotiations despite persistent hurdles.
Background to the dispute
Trade talks between the two nations collapsed last August after Trump imposed 50% tariffs on Indian goods, including penalties targeting Delhi's purchases of Russian oil. Both sides later resumed discussions, but multiple deadlines have passed without resolution.
Key sticking points remain, particularly agriculture. Washington has demanded greater access to India's farm sector, while Delhi has resisted, prioritizing domestic protections.
Lutnick's remarks spark diplomatic friction
In a podcast released Friday, Lutnick claimed the deal was nearly finalized but stalled when Modi declined to call Trump. "It was all set up. I said [to the Indian side] you got to have Modi call the president. They were uncomfortable doing it, so Modi didn't call," he said.
Lutnick, who described Trump's deal-making approach as a "staircase" favoring early agreements, said India was given "three Fridays" to close the deal. He added that after India's hesitation, the US pivoted to other partners, including Indonesia and Vietnam. When Delhi later signaled readiness, Lutnick said, "the train had left the station."
"India and the US were committed to negotiating a bilateral trade agreement as far back as 13 February last year. Since then, both sides have held multiple rounds of negotiations to arrive at a balanced and mutually beneficial trade agreement. On several occasions, we have been close to a deal."
Randhir Jaiswal, Indian Foreign Ministry Spokesperson
Diplomatic exchanges under scrutiny
Jaiswal countered Lutnick's claims, noting that Modi and Trump spoke by phone eight times in 2025, covering "different aspects of our wide-ranging partnership." The White House has not responded to Lutnick's remarks.
In December, US Trade Representative Jamieson Greer told senators India had made its "best ever offer," while calling the country a "tough nut to crack." Trump has since warned of further tariff hikes if Delhi continues buying Russian oil, a practice India defends as necessary for its energy security.
Trade tensions and economic impact
Despite the 50% tariffs, India's goods exports to the US surged 22% year-over-year in November. However, the trade dispute has strained relations, which had warmed after Modi's early visit to the White House following Trump's inauguration.
Recent rhetoric has included Trump's claims of brokering a ceasefire between India and Pakistan-a narrative Delhi has repeatedly rejected. In June, India stated Modi told Trump it would never accept third-party mediation on Kashmir.
Lutnick's comments follow Senator Lindsey Graham's revelation that Trump had "greenlit" a Russia sanctions bill, which could impose secondary tariffs on countries trading with Moscow. Jaiswal said India was "aware of the proposed bill" and monitoring developments, reaffirming its stance on energy needs.
