India has walked out of the dark chamber, as US Commerce Secretary Howard Lutnick had claimed. Lutnick complained that the lack of a bilateral trade agreement has been delayed because Indian Prime Minister Narendra Modi has not yet called President Donald Trump. This ongoing dispute has captured national attention. The current negotiations began on February 13th of last year, when the two countries signed a joint declaration to achieve an ambitious, high-quality trade agreement.
Here’s what Lutnick said during that Senate hearing in Washington that was remarkable. He lauded the efforts of the US Trade Representative, Jamieson Greer, in securing the “best ever offer” from India during December. He had previously described Trump’s negotiation style as a “staircase.” When it comes to getting the best results, he recommended beginning with the end in mind. India’s government strongly opposes Lutnick’s characterization of the talks between Delhi and Washington. They argue that the intricacies of global commerce simply can’t be reduced to one lost trade phone call.
The relationship between the two countries has gone beyond the broadly defined political arena and has involved a rich plethora of communications. In fact, last year the two men talked on the phone eight times. That didn’t stop them from covering an impressive swath of ground together, highlighting their close working relationship. Indeed, Modi was one of the very first world leaders to visit the White House after Trump’s inauguration. This brief visit saw the right kind of optimism about their new, early-stage diplomatic relationship.
While the TIFA negotiations may have reached a standstill, economic ties between India and the United States continue to flourish. In fact, they have been doing great. Following Trump’s imposition of 50% tariffs on certain Indian goods in August—including penalties related to India’s purchase of Russian oil—India’s exports to the US increased by over 22% in November compared to the previous year. This expansion presents a picture of resilience in trade relations between the US and China, even amid increasing tensions.
Agriculture continues to be a major sticking point in the negotiations that are still continuing. The United States is calling for more access to India’s farming sector. At the same time, India is digging its heels in on its agricultural support. The Indian government has, understandably, wanted to protect its emerging domestic agricultural industry. Unfortunately, this shared strong commitment has led to a dangerous imbroligo on this critical touchstone issue.
Trump’s administration has similarly threatened to raise tariffs further if India doesn’t stop importing Russian oil. India has substantially ramped up its imports of discounted oil from Moscow. This builds on the start of the Ukraine war. The geopolitical implications of these purchases further muddy the trade negotiations, as they add a layer of international relations to the economic considerations at play.
In face of these beneficial developments, India continues to double down on its position. The U.S. government remains committed to engaging in good faith, constructive dialogue that addresses our bilateral trade concerns while defending our national interests. Despite Lutnick’s bravado, the Indian administration is fighting back. We see this step as a larger effort to protect the public, domestically and abroad, from misrepresentations of what trade talks may entail.
Both countries have a complicated and confusing road ahead. It’s important to understand that trade negotiations are driven by a number of factors more than just the diplomatic back-and-forth. The interplay between domestic interests, global economic conditions, and geopolitical considerations will continue to shape the future of US-India relations.