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India’s proposed trade agreement with the United States stalled after Prime Minister Narendra Modi did not place a phone call to then-President Donald Trump to finalise negotiations, according to US Commerce Secretary Howard Lutnick.
Speaking on the All-In podcast on Friday, Lutnick said the framework for the deal was largely in place, but Washington expected a direct call from Modi to Trump to conclude it. He claimed Indian officials were hesitant, and as a result, the call never happened.
Trade negotiations later collapsed, prompting Trump to sharply increase tariffs on Indian exports in August last year, raising duties to 50%—the highest imposed on any country. This included an additional 25% levy in response to India’s continued imports of Russian oil.
Lutnick’s remarks came amid renewed pressure from Trump, who warned this week that tariffs could rise further unless India reduces its purchases of Russian energy. The warning unsettled financial markets, pushing the Indian rupee to a record low and rattling investors awaiting progress on bilateral trade talks.
Lutnick added that India is still seeking a tariff arrangement that falls between the terms previously offered to Britain and Vietnam, though that proposal has since lapsed.
India’s commerce ministry did not immediately respond to requests for comment. Previously, Reuters reported that negotiators from both sides were close to reaching an agreement, but talks ultimately broke down due to communication issues. An Indian official involved in the discussions said Modi avoided calling Trump out of concern that the conversation could become one-sided and politically risky.
