US Commerce Secretary Howard Lutnick has blamed the collapse of a proposed India–US trade deal on Indian Prime Minister Narendra Modi. While appearing on a podcast, Donald Trump’s commerce secretary said that the trade deal did not materialise because Modi never made a personal call to the POTUS.
Modi to blame for India-US trade deal failure?
Speaking on the All In Podcast, Lutnick said the agreement was essentially ready but stalled because the final political outreach never happened. “I set the deal up,” he said, adding that he had asked Indian officials to get Modi to call Trump, but “They (India) were uncomfortable with it. So, Modi didn’t call.”
According to Lutnick, Washington had assumed India would be among the first countries to wrap up a trade agreement under Trump’s second term. On that assumption, the US pushed ahead with negotiations with other nations at higher rates. Deals with Indonesia, the Philippines and Vietnam were concluded first, and at tariff levels that 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He added that the conditions India believed were still on offer were no longer valid. “So now the problem is the deals came out at a higher rate and then India calls back it says oh, ‘okay, We’re ready,’ I said ready for what?” Lutnick said. India has yet to formally respond to Lutnick’s remarks.
What now?
Lutnick said that the US has now “stepped back from that trade deal that we had agreed to earlier. We are not thinking about it anymore.”
The US Commerce secretary’s comments come on the heels of a bipartisan Russia sanctions bill approved by Trump on Wednesday (Jan 7) that targets countries buying Russian oil. The legislation, penned by senators Lindsey Graham and Richard Blumenthal, authorises tariffs of up to 500 per cent on imports from countries like India.
Explicitly naming India, China and Brazil, Lutnick said that the bill would give Trump “tremendous leverage” to incentivise these nations to stop buying the cheap Russian oil that “provides the financing for Putin’s bloodbath against Ukraine”.
Recently, while speaking to reporters, Trump said Modi knew he (POTUS) was unhappy with India’s oil imports from Russia and warned tariffs could be raised “very quickly.” Trade talks between the two nations fell apart in 2025, when Trump doubled tariffs on Indian goods to 50 per cent, the highest rate imposed on any major economy. That included a 25 per cent retaliatory levy tied directly to India’s continued purchases of Russian oil.(WION)
