KARACHI: A phone call between Indian Prime Minister Narendra Modi and US President Donald Trump in mid-June appears to have marked the beginning of a dramatic downturn in US-India relations, even as Pakistan finds itself in an increasingly favourable position with the Trump administration.
According to a much-shared Bloomberg report published on Friday, Modi called Trump on June 17 to push back against the US president’s repeated claims that he had brokered an end to a four-day military conflict between India and Pakistan in May. Trump had been touting the ceasefire as evidence of his ability to prevent a nuclear war, while Indian officials insisted that the two South Asian nations had directly negotiated the truce without any outside mediation.
In the 35-minute phone call, Modi clarified that the ceasefire was discussed directly between India and Pakistan, upon Pakistan’s request following Indian bombardment. Modi firmly told Trump that India “does not and will never accept mediation,” according to an Indian readout, adding that Trump “listened carefully”.
Bloomberg reported that what further alarmed New Delhi was intelligence that Trump planned to host Pakistani Army Chief General Asim Munir for lunch at the White House the following day. Indian officials, speaking anonymously to Bloomberg, said Modi’s aides feared Trump might attempt to orchestrate an unexpected face-to-face between the Indian leader and Gen Munir. Wary of such a move, and concerned about the optics of engaging with a military figure New Delhi accuses of backing militant groups, Modi declined an invitation to stop by the White House on his return from the G7 summit in Canada. Officials said Modi also cited a prior commitment to visit Croatia.
Although the White House never formally asked Modi to credit Trump for the ceasefire, according to the Bloomberg report, Indian officials noticed a discernible shift in tone from Washington after the phone call. Trump’s subsequent public criticism of India, culminating in a sharp escalation of trade tensions, was interpreted in New Delhi as retaliation for Modi’s refusal to play along.
This week, Trump announced a sweeping 50 per cent tariff on Indian exports to the US, half of which he said was in response to India’s continued purchases of Russian oil. The duties mark one of the steepest levies imposed on any US trading partner and threaten to undo decades of US-India diplomatic progress.
Trump has ramped up the rhetoric, describing India as a “dead” economy with “obnoxious” trade barriers and accusing the country of indifference to Ukrainian suffering. The two leaders have not spoken since the June call.
Former US ambassador to India Eric Garcetti was quoted by Bloomberg: “The carefully crafted consensus of successive administrations has brought the two largest democracies together for almost three decades, and the administration’s actions could endanger this progress if not brought to quick resolution. I hope that cooler minds will prevail in both capitals. There’s too much at stake.”
India’s Ministry of External Affairs did not respond to queries by the international media outlet. The White House also declined to comment. However, US State Department Deputy Spokesperson Tommy Pigott said during a press briefing, “India is a strategic partner with whom we engage in a full and frank dialog that will continue. Like anything in foreign policy, you’re not going to align 100 per cent of the time on everything”.
Ironically, Trump had earlier hailed Modi as “my dear friend”, and had claimed that the US-India relationship was “the best it’s ever been between two leaders of the two countries”. The optimism that followed Trump’s ‘Liberation Day’ tariffs in April quickly gave way to friction over agricultural access, genetically modified crops and the impact of Trump’s trade deal with China. Trump’s toughened stance toward Russian President Vladimir Putin, and his efforts to penalise countries buying Russian oil, further deepened the divide. When Trump unveiled a 25 per cent “reciprocal” tariff on Indian goods on July 30, it caught New Delhi off guard and derailed trade negotiations. Despite Modi’s vows to protect small-scale Indian farmers, Indian officials are now reportedly considering limited concessions in agriculture and dairy to salvage the relationship. Still, Modi is also reassessing India’s strategic tilt towards Washington. Bloomberg reports: “India has been always kind of an independent actor and has kept its channels open to most countries”, said Wendy Cutler, a former senior US trade negotiator now at the Asia Society Policy Institute. “I am concerned that the recent developments could lead them to reassess their partnership with the United States and maybe warm up to China and other countries.”
India has stepped up high-level engagements with China in recent months, and Modi is expected to visit China later this month for the first time in seven years to meet President Xi Jinping during a regional summit.
Meanwhile, Pakistan appears to have capitalised on the widening rift between Washington and New Delhi. As Bloomberg reported in a separate story, Islamabad has managed to navigate Trump’s volatile foreign policy with relative ease and emerged as one of the few countries to secure a trade deal with the US without much friction -- unlike India, Brazil or Switzerland.
Trump claimed he had brokered the ceasefire, a claim warmly received in Islamabad and flatly rejected in New Delhi. That divergence appears to have shaped the path forward.
Pakistan has also presented strategic and economic opportunities that align with Trump’s interests. The country boasts one of the world’s largest untapped reserves of copper and gold, and Trump-backed investors have explored possibilities similar to US deals with Ukraine. Trump himself has posted online about developing Pakistan’s “massive oil reserves”. And not just that: representatives from World Liberty Financial, a Trump-linked crypto firm, also visited Islamabad and announced cooperation on digital currency development.
All of this culminated in a highly symbolic lunch hosted by Trump at the White House for COAS Gen Asim Munir. Per Bloomberg, while Pakistan faces significant internal challenges, from climate change to IMF dependency, there is growing optimism in Islamabad that the Trump administration offers a fresh window of engagement. According to Reuters, India has meanwhile frozen its plans to procure key US defence equipment, its first concrete response to Trump’s tariffs. Citing unnamed Indian officials, a Reuters report said that Defence Minister Rajnath Singh’s planned visit to Washington had been called off. Talks around major defence acquisitions, including Stryker combat vehicles, Javelin missiles, and a $3.6 billion deal for Boeing P-8I surveillance aircraft, have also reportedly been paused.
Although India’s Ministry of Defence later issued a statement dismissing the reports as “false and fabricated,” multiple sources indicated that discussions had stalled. One official noted that procurement could resume “once India had clarity on tariffs and the direction of bilateral ties”, though there was “no forward movement at least for now”.
Meanwhile, on Thursday, Bloomberg also reported that India’s state-owned oil refiners are pulling back from purchases of Russian crude for now, adding that companies like Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp plan to skip spot purchases of the crude in the upcoming buying cycle until there’s clear government guidance.In a final blow to hopes of a near-term breakthrough, Trump, when asked by Indian news agency ANI in the Oval Office whether trade talks with India would resume, replied bluntly: “No, not until we get it resolved”.
