India-US trade deal follows 12 months of bonhomie and tense moments on tariffs, oil standoff and phone calls

FOr a great deal of the yesteryear yr, the bharat–US merchandise ties appeared locked in an impasse - defined by Trump's tariffs, sharp rhetoric, oil politics and stalled negotiations. Officials traded messages, delegations held rounds of talks, and leaders spoke repeatedly, yet a deal remained out of reach until Monday.After months of uncertainty, a phone call between Prime Minister Narendra Modi and US President Donald Trump produced what both sides now describe as a breakthrough trade pact.The deal, which cuts US tariffs on Indian goods from 50 per cent to 18 per cent, marks a dramatic shift from the deep friction that shaped most of 2025, when the two strategic partners found themselves at odds over tariffs, energy sourcing and trade rules.Track live updates on India-US trade deal hereFrom partnership push to tariff pressureThe latest trade engagement began on a hopeful note last February, when India and the United States launched a renewed negotiation track during PM Modi's US visit. The goal was to finalise an initial tranche of a bilateral trade agreement by autumn.But that momentum faded as disagreements surfaced over market access, tariff structures, digital trade rules and energy purchases. Negotiations slowed, and by spring the tone had hardened.In April, Washington imposed reciprocal tariffs of 25 per cent on Indian imports as part of a broader global tariff action. Some of those duties were temporarily paused, but a baseline levy remained, adding friction to the trade relationship.Tariffs escalate amid oil disputeThe real rupture came in mid-2025, when the US sharply raised tariffs on Indian goods to 50 per cent. The increase included a 25 per cent punitive tariff directly linked to India's continued purchase of Russian crude oil after Western sanctions on Moscow over the Ukraine war.The move made India one of the most heavily tariffed US trading partners and sharply escalated tensions.New Delhi objected strongly, calling the tariffs unfair and reiterating that its energy sourcing decisions were based on market conditions and energy security needs.Even as pressure mounted, Indian officials signalled that Russian oil purchases had begun tapering in recent months.Energy trade quickly became the central fault line in the broader economic dispute, with Washington repeatedly criticising India's Russian crude imports and tying tariff penalties to them.Negotiations continue through frictionDespite the tariff shock, talks did not collapse. Over the year, both sides held at least six formal rounds of negotiations, along with multiple informal consultations.A US delegation led by a deputy trade representative visited India as recently as December 2025 to keep discussions alive.Leadership-level engagement also continued. According to the Ministry of External Affairs, PM Modi and Trump spoke eight times by phone during 2025 as tensions rose and talks stalled.Still, progress remained elusive, and the trade track became increasingly entangled with political messaging and public commentary.Public remarks fuel controversyIn early January, political friction intensified after US Commerce Secretary Howard Lutnick said on a podcast that a trade deal had fallen through because Modi “didn’t call” Trump at a critical moment. Some Trump aides framed the episode as a missed opportunity caused by lack of direct outreach.India rejected that version of events. The MEA said the two leaders had maintained frequent contact throughout the year and that negotiations had continued despite difficulties.The comments triggered domestic political reaction in India, where opposition leaders criticised the US aide's remarks and described the American stance as misguided, while emphasising the long-standing strategic depth of the bilateral partnership.Wider irritants complicate tiesTrade tensions were accompanied by other sources of strain. The period saw tighter US immigration rules and American criticism of India's defence and energy ties with Russia.Trump also repeatedly claimed publicly that he had helped broker a ceasefire after last year’s brief India–Pakistan conflict, a claim New Delhi did not endorse. At the same time, mixed diplomatic signals persisted. Speaking at the World Economic Forum in Davos, Trump described Modi as a “fantastic leader” and called bilateral ties “special,” even as tariff disputes remained unresolved.Sudden breakthrough after leader-level callThe deadlock broke on Monday night following another phone call between PM Modi and Trump. The call was first flagged publicly by the US ambassador to India and later detailed by Trump in a social media post announcing a concluded trade deal framework.Trump said the US would reduce tariffs on Indian goods to 18 per cent with immediate effect. He also said India would reduce tariffs and non-tariff barriers on US goods to zero, commit to purchasing more than $500 billion worth of American energy, technology, agriculture and other products, and stop buying Russian oil while shifting purchases toward the US and potentially Venezuela.India's statements confirmed the tariff reduction and welcomed the agreement but confirmed only part of the broader claims.Also read: 500 billion dollar deal, no Russian oil, 18% tariffs - Inside India-US trade dealPM Modi described it as a “wonderful announcement” and praised closer cooperation between the two countries. His statement did not mention Russian oil, zero-tariff commitments or the $500 billion purchase figure.