'Modi Didn't Call': Trump Aide's Claim On Why India-US Trade Deal Is Still Far From Done

Washington: A fresh explanation from the US is putting the spotlight on a simple but surprising reason why a big India-US trade agreement fell apart and it comes down to one phone call that never happened.

What Did the US Official Say?

US Commerce Secretary Howard Lutnick has said in a recent podcast interview that negotiations for a long-awaited trade deal stalled because Prime Minister Narendra Modi did not personally call US President Donald Trump to seal the agreement. 

Speaking at the All-In Podcast, hosted by Chamath Palihapitiya, Lutnick claimed the main terms were ready, but without that leader-to-leader conversation, the pact could not be finalised.

"Let's be clear, it's his deal. He's the closer. He does the deal. So I said, you got to have Modi. It's all set up. You have to have Modi...they were uncomfortable doing it. So Modi didn't call," he claimed.

Lutnick suggested that Trump was seen as the "closer" who could finalise deals with world leaders. He said that while Washington had concluded agreements with several Asian countries, the deal with India was expected to be signed first but the expected phone call never took place.

"India's (deal) was gonna be done before them (the other countries). I negotiated with them at a higher rate," Lutnick said.

"The US has stepped back from that trade deal that we had agreed to earlier. We are not thinking about it anymore," Lutnick said.

The remarks comes after Donald Trump, on Thursday, approved a bill that can impose at least 500 per cent tariffs for countries buying Russian oil.

Why Does a Call Matter?

In high-stakes trade negotiations between major powers, personal engagement between leaders often sends a political signal that can unlock diplomatic logjams. According to Lutnick, that signal was missing. He said Indian officials were reportedly "uncomfortable" with making the call, and Modi ultimately refrained from reaching out to Trump. 

Because of this communication gap, the US moved ahead with deals involving Indonesia, the Philippines and Vietnam, which were concluded at higher tariff rates.

What Has That Meant for Trade?

The failure to finalise a deal has had real consequences. The Trump administration imposed 50 per cent tariffs on many Indian goods, including a 25 per cent levy tied to India’s imports of Russian crude oil. These duties are among the highest that Washington has applied to any trading partner and have weighed on business sentiment in both countries.