US Commerce Secretary Howard Lutnick revealed on a recent podcast that while a framework agreement had been prepared, the deal’s final approval depended on a direct call from Prime Minister Modi to President Trump, which he said did not happen. “Modi didn’t call Trump. We did a bunch of deals with other countries after that,” Lutnick said, citing deals with Indonesia, the Philippines, Vietnam, and Malaysia as examples. He added that the US had backed off from the finalised agreement following the missed call.
However, India’s Ministry of External Affairs (MEA) rejected Lutnick’s characterization. Spokesperson Randhir Jaiswal clarified that both leaders have communicated multiple times over the past year and that negotiations have consistently remained close to a mutually beneficial agreement. “The reported remarks are not accurate. India and the United States were committed to negotiating a bilateral trade agreement since February last year,” Jaiswal said.
The current dispute centers on the 50% tariffs imposed by the US on Indian imports, including a 25% penalty linked to India’s crude oil purchases from Russia. India has proposed reducing the total tariff to 15% and removing the additional 25% oil-related charge, highlighting that European Union countries received similar tariff relief. Recent figures show India’s imports of Russian oil have declined from 1.77 million barrels per day in November to approximately 1.2 million barrels in December, signaling India’s compliance with US concerns over indirect support to Russia amid the Ukraine war.
President Trump, in earlier remarks, emphasized that India’s reduction in Russian oil imports was intended to “make me happy,” framing the move as a diplomatic gesture. Meanwhile, Indian trade teams recently met in Delhi to discuss both a permanent trade agreement and a framework to adjust the US tariffs. Commerce Secretary Rajesh Agarwal noted that consensus could be reached soon, though no formal timeline has been announced.
As negotiations continue, the final decision now rests with the US administration, with both countries emphasizing the importance of a balanced and mutually beneficial trade relationship. Observers note that a resolution could influence India’s competitiveness in global markets and its broader economic ties with the United States.
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