India Rebuffs US Commerce Secretary Claims Over Trade Deal Collapse

India has formally rejected assertions by US Commerce Secretary Howard Lutnick that bilateral trade negotiations stalled due to Prime Minister Narendra Modi’s failure to contact President Donald Trump. The dispute has emerged against a backdrop of substantial tariff increases and mounting tensions between the two nations.

In August, the Trump administration imposed 50% tariffs on Indian goods, incorporating penalties related to India’s purchases of Russian oil, following the breakdown of trade discussions. Whilst both parties have resumed negotiations, no definitive timeline has been established for concluding an agreement, with several informal deadlines already elapsed.

Agriculture remains a central obstacle in the negotiations. Washington continues to press for enhanced market access to India’s agricultural sector, a demand Delhi has consistently resisted in order to protect domestic farming interests.

Speaking on the All-In Podcast released on Friday, Lutnick suggested the agreement had been near completion at the outset. He claimed that Indian negotiators were uncomfortable arranging a telephone conversation between Modi and Trump, thereby causing the deal to founder. The White House has yet to comment on these statements.

India’s foreign ministry spokesperson Randhir Jaiswal challenged this characterisation on Friday, stating it was “not accurate”. He emphasised that both nations had committed to negotiating a bilateral trade agreement since 13 February of the previous year, with multiple negotiating rounds aimed at achieving a balanced and mutually beneficial outcome. Jaiswal noted that Modi and Trump had spoken by telephone eight times last year, discussing various aspects of their bilateral partnership.

During the podcast interview, Lutnick outlined Trump’s dealmaking approach as resembling a “staircase”, where early movers secure optimal terms. He indicated that India was second in line for trade negotiations after the United Kingdom, and that Washington granted Delhi “three Fridays” to finalise the agreement. According to Lutnick, his function was to negotiate contracts and structure deals, whilst Trump handled final closures. The absence of the anticipated telephone call allegedly derailed progress.

Lutnick stated that following this impasse, Washington concluded agreements with several other nations, including Indonesia and Vietnam. When India subsequently indicated readiness to accept the original terms, he claimed “the train had left the station”.

The precise terms of the purported deal remain unclear. In December, United States Trade Representative Jamieson Greer informed senators that America had received the “best ever offer” from India, whilst simultaneously describing the country as a “tough nut to crack”.

Trump has recently issued multiple statements regarding India and Modi, including warnings of further tariff increases should Delhi continue purchasing Russian oil. India significantly increased its procurement of discounted Russian petroleum following the Ukraine conflict. Delhi has defended this policy by citing the energy requirements of its substantial population.

Since the tariffs took effect, Indian oil refineries have reportedly reduced their purchases from Moscow. Lutnick’s remarks followed Senator Lindsey Graham’s announcement that Trump had approved a comprehensive Russia sanctions bill. If passed by Congress, this legislation would permit higher secondary tariffs and sanctions on countries conducting business with Moscow.

Jaiswal confirmed on Friday that India was monitoring the proposed legislation, reiterating the nation’s position on energy security. Notably, despite the 50% tariffs, Indian goods exports to the United States increased by more than 22% year-on-year in November.

The tariffs and accompanying political rhetoric have strained the India-US relationship. Modi, who previously enjoyed cordial relations with Trump, was amongst the first world leaders to visit the White House following the president’s inauguration. Relations have subsequently deteriorated.

Delhi has repeatedly refuted Trump’s claims of brokering a ceasefire between India and Pakistan following a four-day conflict in May. In June, India stated that Modi had informed Trump that Delhi would never accept third-party mediation with Pakistan concerning Kashmir. The two leaders have spoken by telephone several times since, including in September when Trump called to extend birthday wishes to Modi.