WASHINGTON/NEW DELHI
India–US trade deal stalled after PM Modi did not call Trump, says US Commerce Secretary Howard Lutnick. The revelation highlights how personal diplomacy and timing derailed a high-stakes agreement, leaving tariffs at record levels.
• U.S. Commerce Secretary Howard Lutnick disclosed that the long-anticipated India–US trade pact collapsed because Prime Minister Narendra Modi did not personally call President Donald Trump to close the deal.
• Lutnick explained on the All-In Podcast that the agreement had been “set up,” but Trump expected Modi to make the final outreach. “They were uncomfortable doing it. So Modi didn’t call,” he said.
Tariffs & Fallout:
• In August 2025, Trump doubled tariffs on Indian goods to 50%, citing India’s continued purchases of Russian oil.
• The move rattled investors, pushed the Indian rupee to a record low, and strained bilateral trade relations.
• Lutnick emphasized Trump’s “staircase” approach to deals: the first country to finalize gets the best terms, while delays mean tougher conditions.
Negotiation Breakdown:
• India and the U.S. had reached an understanding, but Washington later backtracked on terms once Modi’s call never came.
• Indian negotiators returned to Lutnick later, but by then the U.S. demanded new conditions, effectively stalling progress.
Geopolitical Context:
• The disclosure came a day after Trump signed a Russia sanctions bill imposing 500% tariffs on countries buying Russian oil, further complicating India’s position.
• Analysts say the episode underscores how personal diplomacy and timing weigh heavily in Trump’s transactional style of negotiations.
Watch points:
• Tariff Pressure: With duties at 50%, Indian exporters face steep costs, threatening competitiveness.
• Diplomatic Strain: The missed call highlights fragile trust in India–US relations.
• Investor Sentiment: Currency volatility and uncertainty over trade terms may deter foreign investment.
(Source – Times of India)
—Owned Sources
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