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A tense phone call on the ceasefire between Pakistan and India became the basis for the current breakdown in relations between Prime Minister Narendra Modi and United States President Donald Trump, Bloomberg reported on Friday.

Trump on Wednesday imposed an additional 25 per cent tariff on Indian goods, citing New Delhi’s continued imports of Russian oil in a move that sharply escalated tensions between the two nations after trade talks reached a deadlock. The new import tax, set to come into place in three weeks, will raise duties on some Indian exports to as high as 50pc — among the highest levied on any US trading partner.

While the rupture in US-India ties was abrupt, there have been strains in the relationship. Delhi has repeatedly rebutted Trump’s repeated statements that the US brokered a ceasefire between India and Pakistan after four days of fighting between the nuclear-armed neighbours in May. Trump also hosted Pakistan’s army chief at the White House in the weeks following the conflict.

The two leaders spoke over the phone at the insistence of Trump on the sidelines of June’s G7 summit in Canada, which Modi attended as a guest. The call lasted 35 minutes.

“PM Modi told President Trump clearly that during this period, there was no talk at any stage on subjects like India-US trade deal or US mediation between India and Pakistan,” Indian Foreign Secretary Vikram Misri had said of the talk. “Talks for ceasing military action happened directly between India and Pakistan through existing military channels, and on the insistence of Pakistan. Prime Minister Modi emphasised that India has not accepted mediation in the past and will never do,” he said.

Bloomberg reported today that “tensions came to a head” between the two leaders in the call with Trump’s repeated claiming of credit and India’s downplaying of the matter.

“Modi felt like he needed to set the record straight in the call after his aides discovered that Trump planned to host a lunch the following day at the White House for Pakistani Army Chief Asim Munir,” the report cited officials in New Delhi familiar with the matter, who requested anonymity to speak about confidential discussions.

“While India had no problem if Trump met Pakistan’s civilian leaders, hosting Munir was seen as giving legitimacy to a military that Modi’s government accuses of supporting militant groups, they said. Wary that Trump would look to orchestrate a meeting between Munir and Modi, the Indian leader turned down an invitation to stop by the White House on the way back from Canada, they said, adding that he was also committed to visiting Croatia,” the report said.

It added that since the phone call, “India saw a shift in tone from the White House after that phone call, according to the officials in New Delhi” despite the US not making a direct request for Modi to acknowledge Trump’s role.

“Once Trump began publicly attacking India, they added, it was clear the episode marked a turning point in the broader relationship,” the report said.

Modi said a day ago he would not compromise on the agriculture sector.

For New Delhi, one of the main sticking points in trade negotiations has been Washington’s demand to access India’s vast agricultural and dairy market. India has remained steadfast about its labour-intensive agricultural sector, unwilling to risk angering farmers, a powerful voting bloc.

“We will not compromise with the interests of our farmers, our dairy sector, our fishermen,” Modi said during a speech at a conference in New Delhi, his remarks widely seen as his first public response to the tariffs.

“I know I will have to pay a personal price for this, but I am ready for it,” he added, without giving further details.

In February, Trump said that he found a “special bond” with Modi when he visited Washington — complimenting Modi as being a “much tougher negotiator” than he was.

Successive US administrations have seen India — the world’s most populous nation and fifth-largest economy — as a key partner, with like-minded interests in the face of powerful China.

India and neighbouring China have long been intense rivals competing for strategic influence across South Asia.

Now, India is bracing for a bumpy ride, as the US is its largest trading partner, with New Delhi shipping goods worth $87.4 billion in 2024.

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