Yes, @DianeW777 is correct in her response to you. By not reporting an amount in Box 1a, the income from your dividends was completely excluded from your federal AGI and as a result, you weren't taxed because it ignored your qualified dividend amount you reported in Box 1b. There must be an amount reported in Box 1A as a starting point.
By reporting an amount in Box 1a, you are reporting you have income from your dividends. Reporting the qualified dividend amount in Box 1b, you are telling us that the amount reported in Box 1A is eligible for the lower capital gains tax rate (0%, 15%, or 20%) rather than your standard income tax rate. Now your refund has been reduced because you reported in both boxes, but the tax on those dividends are taxed at the lower capital gains rate than the ordinary tax rate.
As far why you didn't get the full credit, you cannot take a credit for more tax than the U.S. would have charged you on that same income. If the U.S. tax on those dividends is lower than what you paid to India, your credit is capped at the U.S. tax amount.
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