Day 1 in office, US ambassador Sergio Gor brings a soothing touch to India-US trade ties after turbulent week

US Ambassador to India Sergio Gor

US Ambassador to India Sergio Gor sought to calm frayed nerves in New Delhi on his first day in office amid lingering uncertainty over the trade deal.

Speaking at a ceremony attended by US embassy employees in New Delhi, Gor struck a reassuring tone after remarks by President Donald Trump and Commerce Secretary Howard Lutnick över the last week added to tensions between the two sides.

He said that the next round of India-US trade talks will take place tomorrow (January 13) and indicated that President Donald Trump may visit India soon.

"No country is as essential as India for Washington and both sides are actively engaged in firming up a trade deal," Gor said.

He added that while real friends can disagree, they always resolve their differences in the end, reaffirming that the friendship between Prime Minister Narendra Modi and President Donald Trump stays strong

"India is the world's largest nation. So it's not an easy task to get this across the finish line, but we are determined to get there," he said, adding that both countries are boosting cooperation across several areas besides trade.

Trump has imposed steep 50% tariffs on Indian goods, warning that they could rise further.

Gor's remarks lift investors' sentiment

The remarks by Gor had a positive impact on the markets, which swung from red to green within minutes.

Benchmark equity indices Sensex and Nifty rebounded sharply from the day’s low and settled higher after facing a massive drubbing in the past five trading sessions. The market mood was also propelled by bargain hunting in energy, banking and metal shares.

Sensex climbed 301.93 points, or 0.36 percent to settle at 83,878.17. During the morning trade, it tumbled 715.17 points, or 0.85 percent to 82,861.07, breaching the 83,000 level. Nifty edged higher by 106.95 points, or 0.42 percent to 25,790.25. The benchmark tanked 209.9 points, or 0.81 percent to 25,473.40 in morning trade.

Dharmesh Kant, head of equity research at Cholamandalam Securities, said: "It needs to be seen if the recovery sustains. The correction last week from near record highs was surprising as it contradicted decent business updates from companies."

Week of uncertainty

Comments made by Trump and his aides, along with a bipartisan bill proposing up to 500% tariffs on buyers of Russian oil, weighed heavy on the trade ties between the two countries.

Last week saw differing accounts from the two sides on why the trade pact stalled in 2025.

In a podcast, US Commerce Secretary Howard Lutnick claimed that the trade deal stalled because Prime Minister Narendra Modi did not call President Donald Trump.

"It was all set up. I said [to the Indian side] you got to have Modi call the president. They were uncomfortable doing it, so Modi didn't call," Lutnick said, faulting India for not moving quickly enough.

However, India rejected these remarks as "inaccurate".

"India and the US were committed to negotiating a bilateral trade agreement as far back as 13 February last year. Since then both sides have held multiple rounds of negotiations to arrive at a balanced and mutually beneficial trade agreement. On several occasions, we have been close to a deal," external affairs ministry spokesperson Randhir Jaiswal told reporters during a media briefing.

The biggest blow last week came from Trump himself, who threatened to raise tariffs on India "very quickly" if New Delhi does not meet Washington's demand to curb purchases of Russian oil.

"Modi is a very good guy and he knew I was not happy. And it was important to make me happy. They do trade and we could raise tariffs on them very quickly," He said.

The US President also said that Modi is “not that happy with me” because of the tariffs imposed on India over its purchase of Russian oil.

Later in the week, Republican Senator Lindsey Graham said that Trump has approved moving forward with the bipartisan sanctions bill targeting those buying Russian oil, including India.

The bill has proposed 500% tariffs on all goods and services imported from countries that “knowingly engage in the exchange of Russian-origin uranium and petroleum products”.

Graham said the bill would give Washington added leverage over countries “fueling Putin’s war machine” by purchasing Russian oil.

India shows resolve

On its part, the Modi government depicted resolve, choosing to maintain a studied refrain amid Trump's tirade.

Sources told The Indian Express last week that the diplomatic circles in New Delhi are calling for restraint and political maturity amid Trump's onslaught.

They added that a tit-for-tat response can be "counter-productive", adding that "there is no point in scoring points" at a time when both the countries are looking to finalise the bilateral trade deal.

However, the MEA said on Friday it is closely tracking the sanctions bill cleared in US.

"We are aware of the proposed bill. We are carefully monitoring all related issues and developments connected with it. At the same time, I would like to say that, as far as energy sources are concerned, you are well aware of our approach," Jaiswal said during a briefing.

Jaiswal reiterated the Modi government's position on India's purchase of Russian oil despite Western pressure. "We take into account the conditions and environment in the global market, while also keeping in mind our imperative of ensuring that energy is made available at affordable prices to our 1.4 billion people. Based on these factors, we determine our strategy and policy," he said.