New Delhi/ Washington: India’s long-anticipated trade agreement with the United States has been delayed, with sources pointing to the absence of a critical telephone call between Prime Minister Narendra Modi and former US President Donald Trump, Commerce Secretary Howard Lutnick revealed on Friday.
Speaking on the All-In podcast, Lutnick said, “It’s all set up and you have got to have Modi call the president. And they were uncomfortable doing it. So Modi didn’t call.” The statement underlined the breakdown in communication that led to the collapse of negotiations last year.
Following the failed talks, the Trump administration doubled tariffs on Indian goods in August, imposing what became the world’s highest rate at 50 per cent. A 25 per cent levy specifically targeted India’s purchases of Russian oil, signalling Washington’s discontent over New Delhi’s trade choices.
The comments come amid renewed pressure from Trump on India to curb Russian oil imports, warning that tariffs could rise further if India failed to comply. The announcement triggered a sharp fall in the Indian rupee, unsettling investors awaiting clarity on the stalled trade pact.
According to Lutnick, India had sought a tariff rate that would sit between the offers made to Britain and Vietnam, but the proposal has since expired. Reuters reported that officials involved in the talks noted Prime Minister Modi’s reluctance to engage in a direct conversation with Trump, fearing it could place him in a politically vulnerable position.
India’s Ministry of Commerce has not responded to requests for comment on Lutnick’s remarks. While negotiations had reportedly brought New Delhi and Washington to the verge of a deal last year, a lack of direct communication ultimately prevented its finalisation
The episode underscores the fragility of international trade negotiations, where diplomatic nuance and personal communication often play a decisive role in shaping economic outcomes.