‘I set the deal up, but Modi didn’t call Trump’: US Commerce Secretary on failed India-US trade deal

The long-anticipated India–U.S. trade deal has stalled, with no agreement materialising, largely because Prime Minister Narendra Modi did not personally call U.S. President Donald Trump, according to Howard Lutnick, the U.S. Commerce Secretary. Speaking publicly, Lutnick said, “I set the deal up. But you had to have Modi call President Trump. They were uncomfortable with it. So Modi didn’t call.” His comments offer the clearest explanation yet from a senior U.S. official on why months of negotiation have not yielded results.

The deadlock contrasts sharply with early optimism in 2025, when Modi was among the first world leaders to meet Trump after his election, and both leaders pledged to double bilateral trade to USD 500 billion by 2030. Despite assurances of a “mutually beneficial trade agreement,” progress slowed, and by December India faced tariffs as high as 50%, even surpassing duties on China.

Negotiations have been complicated by strategic and economic factors. The U.S. seeks dependable supply-chain partners outside China, while India needs continued market access to sustain export-led growth. Additional friction arose over India’s continued imports of Russian oil, prompting the U.S. to impose punitive tariffs. India maintains its energy decisions are market-driven, with refiners buying discounted Russian oil through non-sanctioned channels.

The delay is proving costly: economists estimate that the high tariffs could reduce India’s GDP growth by 0.5–0.6 percentage points and keep markets cautious, while U.S. consumers face higher costs. Analysts now suggest that personal diplomacy at the highest level may be the missing factor in securing the elusive deal.(With inputs from Agencies)