India Responds to Stalled Trade Deal Claims
India has disputed claims made by US Commerce Secretary Howard Lutnick regarding the stalling of a trade deal between the two countries. Lutnick stated the deal encountered issues because Prime Minister Narendra Modi did not contact then-President Donald Trump, despite suggesting the agreement was initially near completion.
In a recent podcast, Lutnick claimed the deal was "all set up" and he advised the Indian side to have Modi call Trump. He stated that the Indian officials were "uncomfortable" doing so, and consequently, Modi did not make the call. The White House has not issued a comment on Lutnick's statements.
On Friday, India's foreign ministry spokesperson, Randhir Jaiswal, stated that Lutnick's characterization of discussions between Delhi and Washington was "not accurate." Jaiswal clarified that India and the US began negotiating a bilateral trade agreement on February 13 last year, holding multiple rounds of talks aimed at a balanced and mutually beneficial outcome. He added that the countries had been close to a deal on several occasions and that Prime Minister Modi and President Trump had engaged in eight phone calls last year, discussing various aspects of their partnership.
Negotiation Details and Sticking Points
Lutnick further explained Trump's deal-making approach as a "staircase," implying that earlier negotiators secured better terms. He stated that India was the second country to negotiate a trade deal with the US, after the UK, and was given "three Fridays" to finalize the agreement. Lutnick described his role as negotiating contracts and setting up deals, with Trump being responsible for closing them. He attributed the agreement's difficulties to India's reported reluctance to arrange a phone call. Subsequently, the US finalized deals with other nations, including Indonesia and Vietnam. Lutnick also remarked that by the time India was reportedly ready to accept the initial deal, "the train had left the station."
The specific terms of the deal Lutnick referred to remain unspecified. Agricultural access has been a consistent point of contention, with the US seeking greater entry into India's farm sector, which India has maintained protections over. In December, United States Trade Representative Jamieson Greer informed senators that the US had received India's "best ever offer," characterizing India as a "tough nut to crack."
Tariffs and Broader Relations
Recently, Trump has issued statements regarding India and Modi, including a warning about increased tariffs if India continues to purchase Russian oil. India increased its acquisition of discounted oil from Russia following the Ukraine conflict, citing the energy requirements of its large population. Reports indicate that Indian oil refiners have reduced purchases from Moscow since the tariffs were implemented.
Lutnick's remarks followed Senator Lindsey Graham's announcement that Trump had endorsed a Russia sanctions bill. This proposed legislation, if passed, would enable more stringent secondary tariffs and sanctions on countries engaging in business with Moscow. Jaiswal confirmed on Friday that India is "aware of the proposed bill" and is "closely following developments," reiterating India's position on its population's energy needs.
Despite the implementation of 50% tariffs, India's goods exports to the US increased by over 22% in November year-over-year. The tariffs and associated statements have affected the relationship between India and the US. While Prime Minister Modi was an early visitor to the White House during Trump's presidency, relations have since faced challenges. India has consistently denied Trump's claims of mediating a ceasefire between India and Pakistan in May following a four-day conflict. In June, India stated that Modi informed Trump that third-party mediation on the Kashmir issue with Pakistan would not be accepted. The leaders have held several phone conversations since, including a birthday call from Trump to Modi in September.