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11-01-2026
Bureau Report
NEW DELHI: India’s trade pact with the United States was delayed because Prime Minister Narendra Modi did not make a telephone call to President Donald Trump to close a deal they were negotiating, Commerce Secretary Howard Lutnick said on Friday.
The trade talks fell apart last year and Trump doubled tariffs on Indian goods in August to 50%, the world’s highest rate, including a levy of 25% in retaliation for India’s purchases of Russian oil.
“It’s all set up and you have got to have Modi call the President. And they were uncomfortable doing it,” Lutnick said in an interview on the All-In podcast, a US show by four venture capitalists that focuses on business and technology.
“So Modi didn’t call.”
The comments came after Trump stepped up the pressure for talks with a warning this week that tariffs could rise further unless India curbs its Russian oil imports.
That step pushed the Indian rupee to a record low and spooked investors waiting for progress in two-way negotiations for a trade deal that remains elusive.
India still seeks a tariff rate between Washington’s offers to Britain and Vietnam that had formerly been agreed but the offer has expired, Lutnick added.
India’s trade ministry did not immediately respond to an e-mailed request for comment on Lutnick’s remarks.
New Delhi and Washington were very close to a trade deal last year but a communication breakdown led to the collapse of any potential pact, sources reported.
It cited an Indian government official involved in the talks as saying that Modi could not have called Trump, for fear that a one-sided conversation would put him on the spot.
Earlier, after five rounds of trade negotiations, Indian officials were so confident of securing a favorable deal with the United States that they even signaled to the media that tariffs could be capped at 15%.
Indian officials expected US President Donald Trump to announce the deal himself weeks before the August 1 deadline. The announcement never came.
Interviews with four Indian government officials and two US government officials revealed previously undisclosed details of the proposed deal and an exclusive account of how negotiations collapsed despite technical agreements on most issues.
The officials on both sides said a mix of political misjudgment, missed signals and bitterness broke down the deal between the world’s biggest and fifth-largest economies, whose bilateral trade is worth over $190 billion.
The White House, the US Trade Representative office, and India’s Prime Minister’s Office, along with the External Affairs and Commerce ministries, did not respond to emailed requests for comment.
India believed that after visits by Indian Trade Minister Piyush Goyal to Washington and US Vice President J.D. Vance to Delhi, it had made a series of deal-clinching concessions. New Delhi was offering zero tariffs on industrial goods that formed about 40% of US exports to India, two Indian government officials told media.
Despite domestic pressure, India would also gradually lower tariffs on US cars and alcohol with quotas and accede to Washington’s main demand of higher energy and defence imports from the US, the officials said.
“Most differences were resolved after the fifth round in Washington, raising hopes of a breakthrough,” one of the officials said, adding negotiators believed the US would accommodate India’s reluctance on duty-free farm imports and dairy products from the US. (Int’l News Desk)
