New Delhi: A proposed India-United States trade agreement collapsed because Prime Minister Narendra Modi did not personally reach out to the US President Donald Trump, according to a controversial claim made by US Commerce Secretary Howard Lutnick. The remarks, made during an appearance on the popular All In Podcast, have sparked fresh debate over the future of India-US trade ties at a time of growing geopolitical and economic friction.
Lutnick alleged that the trade deal was effectively ready and had reached an advanced stage but failed at the final political level due to the absence of direct communication between the two leaders. “I set the deal up,” Lutnick said, claiming he had urged Indian officials to facilitate a phone call between Modi and Trump to seal the agreement. “They were uncomfortable with it. So, Modi didn’t call,” he added.
According to Lutnick, Washington had expected India to be among the first countries to conclude a trade deal under Trump’s second term. On the assumption that India’s agreement was imminent, the US proceeded to finalise trade negotiations with other Asian nations, including Indonesia, the Philippines, and Vietnam. These deals, Lutnick said, were negotiated at higher tariff levels, which later complicated talks with New Delhi.
“So that Friday left. The middle of the next week we did Indonesia, Philippines, Vietnam. We announced a whole bunch of deals,” Lutnick said. “And because we negotiated them and assumed India was gonna be done before them, I had negotiated them at a higher rate.”
He claimed that when India later signalled readiness to move forward, the terms it believed were still available were no longer on the table. “Now India calls back and says, ‘Okay, we’re ready.’ I said ready for what?” Lutnick remarked, suggesting the window of opportunity had closed. He added that the US has now “stepped back from that trade deal” and is “not thinking about it anymore.”
India has not officially responded to Lutnick’s comments.
The remarks come amid heightened tensions between the two countries over trade and energy policy. Earlier this week, Trump approved a bipartisan Russia sanctions bill that authorises tariffs of up to 500 per cent on imports from countries purchasing Russian oil. Explicitly naming India, China, and Brazil, Lutnick said the legislation would provide Trump with “tremendous leverage” to pressure these nations to stop buying discounted Russian crude, which he claimed was financing Russia’s war in Ukraine.
Trump has repeatedly expressed displeasure over India’s continued oil imports from Russia. Speaking to reporters recently, he warned that tariffs could be raised “very quickly,” noting that Modi was aware of his unhappiness on the issue.
Trade relations between India and the US had already deteriorated in 2025, when Trump doubled tariffs on Indian goods to 50 per cent, the highest imposed on any major economy at the time. This included a 25 per cent retaliatory levy directly linked to India’s Russian oil purchases.
