India–US Trade Deal Stalls After Modi Didn’t Call Trump — Here’s Why

US Commerce Secretary Howard Lutnick has claimed that the India–US trade deal is not finalised because Prime Minister Narendra Modi did not call US President Donald Trump.

According to reports, while speaking at the All-In Podcast hosted by Chamath Palihapitiya, Lutnick said, "I set the deal up. But you had to have Modi call President Trump. They (India) were uncomfortable with it. So, Modi didn't call."

Lutnick further added that they had negotiated with other countries earlier, assuming that the deal with India will happen earlier.

"We did trade deals with Indonesia, the Philippines, and Vietnam. We assumed a trade deal with India before them. So, now the problem is that the deals came out at a higher rate and then India claws back," said Lutnick.

"Lets be clear, its his (Trump's) deal. He is the closer. He does it. Its all set up, you got to have Modi, call the President. They were uncomfortable doing it. So, Modi didn't call. That Friday left, in the next week we did Indonesia, the Philippines, Vietnam, we announced a whole bunch of deals. Because we negotiated with them and assumed that India is going to be done before them and negotiated with them at a higher rate. So now the problem is, that the deals came out at a higher rate and then India claws back and says oh okay, we are ready. I said ready for what?!" the US Commerce Secretary stated.

In addition, Lutnick asserted that the terms under which the US and India seemed to close the trade agreement were no longer available. "The US has stepped back from that trade deal that we had agreed to earlier. We are not thinking about it anymore," Lutnick said.

"You know, it was like 3 weeks later. I go, "Are are you ready for the train that left the station three weeks ago?" Lutnick added.

The Indian government has not yet responded to Lutnick's remarks.

Tariff Threats Persist

Meanwhile, Indian industry groups have have downplayed the significance of recent tariff threats from the US, characterising them as a negotiating pressure strategy rather than an instant change in policy.

Executives in the oil industry told The Economic Times that trade negotiations between the US and India are complicated and ongoing and that since energy trade is still advantageous to both parties, such remarks are unlikely to change business decisions anytime soon.

Indian industry executives further told The Economic Times that Trump's recent actions in Venezuela, along with the imposition of a 50% tariff on Indian goods last year, have lent credibility to such threats. Even so, they expect the proposed 500% secondary tariff to be wielded primarily as leverage rather than actually imposed.