India has firmly rejected US Commerce Secretary Howard Lutnick’s assertion that the India US trade deal failed to materialise because Prime Minister Narendra Modi did not make a personal phone call to President Donald Trump, as bilateral talks continue amid 50% US tariffs India and disputes linked to India Russian oil purchases.
The Indian foreign ministry on 9 January 2026 described Lutnick’s characterisation as “not accurate”. Spokesperson Randhir Jaiswal highlighted that Modi and Trump spoke eight times in 2025, covering various aspects of the partnership. This rebuttal addresses Lutnick’s comments on the All-In Podcast, where he claimed the deal was “all set up” but required Modi to call Trump directly, and India’s discomfort led to the call not happening.
The core dispute centres on the stalled India US trade deal. Negotiations began as early as 13 February 2025, with multiple rounds held. Both sides came close to agreement on several occasions. Jaiswal stressed India’s commitment to a balanced and mutually beneficial India US trade deal.
Details of the Dispute
Lutnick, speaking on the podcast released around 8 January 2026, said he set up the deal and that Trump, as the “closer”, needed Modi to call to finalise it. He added that India was uncomfortable, “so Modi didn’t call”. This, he claimed, caused the US to move on and conclude deals with other nations like Indonesia, Vietnam, and the Philippines.
India’s response counters this narrative directly. The ministry pointed to the eight Modi Trump phone calls in 2025 as evidence of ongoing high-level engagement. No specific date for the alleged missed call was provided in Lutnick’s remarks.
This exchange highlights ongoing strains. Trump imposed 50% US tariffs India in August 2025, including penalties tied to India Russian oil imports. The tariffs affect key sectors like steel, aluminium, and textiles.
Impact of US Tariffs India
The 50% US tariffs India have impacted bilateral trade significantly. Imposed partly as a response to India’s continued purchases of discounted Russian crude after the Ukraine conflict began, the duties aim to pressure Delhi.
India defended its India Russian oil strategy as essential for the energy needs of its 1.4 billion population and to control inflation. Cheaper Moscow oil helped save billions in import costs.
Since the tariffs took effect, Indian refiners have reduced Russian crude purchases, according to multiple reports. Diversification towards suppliers like Saudi Arabia and the UAE has increased.
Despite the tariffs, India’s exports to the US grew over 22% in November 2025 compared to the previous year, showing resilience in trade flows.
Sticking points in the India US trade deal include US demands for greater access to India’s agriculture sector. Delhi has protected its farmers fiercely. Other issues involve intellectual property, digital trade rules, and visa reforms for Indian professionals.
US Trade Representative Jamieson Greer described India’s offer in late 2025 as the “best ever” but called the nation a “tough nut to crack”.
Context on India Russian Oil
India’s ramp-up in India Russian oil imports post-2022 has been a flashpoint. The US views it as undermining sanctions on Moscow.
Trump has warned of further tariff increases unless India halts these purchases. A US Senate bill, reportedly greenlit by Trump on 7 January 2026, could impose even higher secondary tariffs on countries trading with Russia if passed.
Jaiswal said India is closely following these developments while prioritising domestic energy security.
Background
India-US ties have seen ups and downs under the current administrations. Modi visited the White House early in Trump’s second term, but trade frictions persist.
A brief India-Pakistan conflict in May 2025 added complexity, with Trump claiming mediation Credit, which India denied. In June 2025, Modi reiterated no third-party role on Kashmir.
Bilateral trade reached $190 billion in 2024, underscoring economic interdependence. The proposed India US trade deal seeks to resolve duties, boost investment, and cover goods and services.
Pre-escalation tariffs averaged around 13%. The current 50% level has prompted retaliatory duties from India on select US products like nuts and apples.
Economists estimate a successful deal could add tens of billions to trade volumes. For South Asia, stable US-India relations help maintain regional economic balance, with implications for neighbours like Pakistan.
What’s Next
Negotiations remain ongoing with no fixed timeline. Informal deadlines were missed last year. Trump may intensify pressure on India Russian oil. India continues diversifying energy sources.
Congressional action on the Russia sanctions bill could trigger higher US tariffs India. A phased or mini-deal on less contentious issues appears possible.
The India US trade deal holds key importance for resolving tensions and fostering stronger economic ties in the region.
Published in SouthAsianDesk, January 10th, 2026
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