India missed trade deal window as PM Modi did not call Trump: Lutnick

India missed a crucial trade deal window with the US after PM Modi did not call President Trump, pushing New Delhi further back as Washington signed pacts with other countries

The trade deal with India was delayed as New Delhi missed the negotiating window set by Washington and Prime Minister Narendra Modi did not make a telephonic call to President Donald Trump, United States (US) Secretary of Commerce Howard Lutnick said on Friday.

 

“It’s all set up. You have to have Modi call the President. They were uncomfortable doing it, so Modi didn’t call,” Lutnick said in an interview on the All-In podcast.

 

According to him, the United Kingdom (UK) was the first country to finalise a trade pact with the US — in May — after which the Trump administration adopted a ‘staircase’ approach, where countries that acted early got a better deal. India was given a deadline and was expected to take a political call, including a call from Modi to Trump. Meanwhile, the US signed trade deals with other Asian countries at higher rates as Washington ‘assumed’ that the trade deal with India would be finalised before other Asian countries.

 

“...we did Indonesia, the Philippines, and Vietnam. We announced a whole bunch of deals in Asia. Because we negotiated them and assumed India was going to be done before them, I negotiated them at a higher rate. So now the problem is the deals came out at a higher rate. And then India calls back and says, we were ready. I said, ready for what? It was like three weeks later. I said, ready for what? It was like three weeks ago. Are you ready for the train that left the station three weeks ago?” he said.

 

Even as India was the first country to launch trade talks in March, uncertainty regarding the finalisation of the deal continues.

 

The US’s trade deal with Britain was finalised in May, followed by agreements with Asian countries such as the Philippines and Vietnam in July.

 

After nearly finalising the pact, trade talks between India and the US fell apart last year around July. Thereafter, in August, Trump imposed 50 per cent tariffs on several Indian goods, including a 25 per cent duty in retaliation for India’s purchases of Russian oil.

 

India and the US have been working on a broad bilateral trade agreement, which will take time to materialise, and a framework trade deal to address the burden of the 50 per cent tariff on Indian exporters. Both sides have already missed the ‘Fall’ of 2025 deadline to finalise the framework trade deal, despite over half a dozen rounds of negotiations. The reasons broadly include India’s reluctance to stop buying Russian crude oil, Washington’s demand over India’s ‘sensitive’ agricultural goods, as well as disagreement over finalising the rate of reciprocal tariff as far as New Delhi is concerned.

 

While Lutnick acknowledged that a trade deal ‘will work out’, other countries moved forward to finalise deals with the US, which pushed India further back in the queue. India later sought a tariff rate between Washington’s offers to the UK at 10 per cent and Vietnam at 20 per cent that had formerly been agreed, but the offer has expired, he said.