‘India-US trade deal stalled over Modi call’, says US official:India rejects US Commerce Secy’s claim, cites multiple phone talks of both leaders

US Commerce Secretary Howard Lutnick has revealed the reason behind the delay in the India-US trade deal. Speaking on a podcast, Lutnick said the framework of the agreement had already been prepared. However, he noted that it was clearly understood from the beginning that the final approval depended on a single individual who had the authority to formally seal such agreements. Lutnick said he told the Indian trade delegation that Prime Minister Narendra Modi needed to personally call the US President to move the trade deal forward. However, Indian officials were reportedly uncomfortable with the request, and Prime Minister Modi did not call President Donald Trump. “As a result, the process stalled. In the following days, we moved ahead with other countries. Deals were announced with Indonesia, the Philippines, Vietnam, and Malaysia over the next week”, Lutnick added. He also revealed that it was the US that backed off from the finalised agreement. He said, India remembers the deal we agreed to. I remember it. They tell me you agreed to this deal. I told them I agreed then. Not now “Modi didn’t call Trump. We did a bunch of deals after that. And later India called and said okay we’re ready. And I said ready for what? You’re ready for the train that left the station three weeks ago?”, Lutnick added. Also Read: How India bypassed Trump’s tariff push Not accurate: MEA The Ministry of External Affairs, however, stated that the characterisation by US Commerce Secretary Howard Lutnick was ‘not accurate’ and both countries had been close to a trade deal on several occasions.

MEA Spokesperson Randhir Jaiswal said at the weekly presser, On several occasions, we have been close to a deal. The characterization of these discussions, the reported remarks, is not accurate
Prime Minister Narendra Modi and President Donald Trump have spoken over phone on several occasions over the past year, covering different aspects of wide ranging partnership between India and the US, Jaiswal said.
“We have seen the remarks. India and the United States were committed to negotiating a bilateral trade agreement with the US as far as far back as 13th of February last year. That is, since then, two sides have held multiple rounds of negotiations to arrive at a balanced and mutually beneficial trade agreement,” the MEA spokesperson said.
“On several occasions, we have been close to a deal. The characterization of these discussions, the reported remarks, is not accurate,” he said.
India remains interested in a mutually beneficial trade deal between two complementary economies, and looks forward to concluding it, he noted. US official’s statement debunks Trump’s claim US Commerce Secretary’s statement, however, contradicts US President’s claim on January 7, 2026 that Prime Minister Narendra Modi had requested a meeting with him, expressing displeasure over Washington’s decision to impose a 50% tariff on India. Trump said the tariff was imposed because of India’s purchase of Russian oil. According to news agency PTI, Trump made this remark on Tuesday at a meeting with members of the House Republican Party in Washington. Trump also said, PM Modi himself came to meet me. He came up to me and said—Sir, may I meet you? And I said—yes. Trump has imposed a total 50% tariff on India, of which 25% extra tariff was applied due to the purchase of Russian oil. India proposed final offer for trade deal India has presented its final proposal to the US in trade talks. India seeks to reduce the total 50% tariff imposed on it to 15% and to completely remove the extra 25% penalty on crude oil purchases from Russia. The ongoing talks between the two countries raise hopes of a concrete decision in the new year. Negotiations are underway for a comprehensive bilateral trade agreement (BTA) between the two countries. Commerce Secretary Rajesh Agarwal said that consensus on the agreement could be reached soon, although he did not specify any timeline. This week, the trade teams of India and the US met in Delhi. The talks are focused on two issues: first, a large and permanent trade agreement, and second, a framework agreement to remove or reduce the 50% tariff imposed on India by the US. Also Read: Congress posts AI video to mock PM over Trump’s remarks 25% tariff due to Russian oil purchases The United States imposed a total 50% tariff on India. Of this, 25% is classified as a ‘reciprocal tariff,’ while the remaining 25% is imposed due to India’s purchases of Russian oil. The US argued that these purchases indirectly support Russia’s war efforts in Ukraine. India, however, maintains that this penalty is unjust and should be removed immediately. Sources involved in the talks indicate that the negotiations on the framework were reportedly completed around Diwali, but a formal announcement from the US, particularly from President Trump, was awaited. Officials pointed directly to the White House for the delay. Also Read | India, New Zealand finalise free trade deal after 10-year talks Russian oil imports There is, however, reason for cautious optimism. January figures may show a significant reduction in India’s imports of Russian oil. Since November 21, US sanctions have targeted Russia’s major oil companies, Rosneft and Lukoil, and India’s imports from Russia have begun to decline. According to a Reuters report, India’s Russian oil imports fell from approximately 1.77 million barrels per day in November to around 1.2 million barrels per day in December. In the near future, this figure could drop below 1 million barrels per day. It’s important to note that after the Ukraine war, India became the largest oil purchaser of crude oil produced in Russia, a move repeatedly questioned by the Trump administration, accusing India of indirectly funding Russia’s attacks on Ukraine. India seeks tariff relief similar to the EU India is now pushing to reduce the remaining 25% tariff to 15%, seeking the same relief granted to the European Union. If the tariff remains higher, Indian exporters could face a competitive disadvantage. For comparison, the US tariff on Indonesia was reduced from 32% to 19%. India insists it should receive similar treatment. The country has clearly conveyed to the US that the penalty related to Russian oil should be removed and that the total tariff should be lowered to 15%. The decision now rests with the US, and all eyes are on President Trump. Trump earlier claimed, ‘Modi wanted to please me’ Trump also made a statement yesterday regarding India reducing oil imports from Russia. He said that India made this decision to make him happy. Trump said: They wanted to make me happy. Prime Minister Modi is a very good person. He knew I was not happy, so it was necessary to make me happy. We do business and could increase tariffs on them. After the Ukraine war, India became the largest buyer of Russian oil. US officials had alleged that by buying oil from Russia, India was funding the attacks on Ukraine. Also Read | Will Modi broker Russia-Ukraine ceasefire instead of Trump? Yesterday, Trump also commented on India reducing its imports of Russian oil. He said India made this decision to please him. Trump said: They wanted to make me happy. Prime Minister Modi is a very good person. He knew I was not happy, so it was necessary to make me happy. We trade, and we can raise tariffs on them. After the Ukraine war, India became the largest buyer of Russian oil. US officials had alleged that by buying oil from Russia, India was funding the attacks on Ukraine. Another claim by US official, ‘Indian envoy appealed to remove 25% tariff’ US Senator Lindsey Graham, who was with Trump, claimed yesterday that about a month ago, he had visited the home of Indian Ambassador Vinay Mohan Kwatra. During that meeting, the main discussion was India’s reduction in its purchase of Russian oil. He said the Indian envoy asked him to convey a message to President Trump to remove the extra 25% tariff imposed on India. According to Lindsey Graham, India is now buying significantly less oil from Russia compared to before. This issue was a major point of discussion during the talks.