With trade negotiations between India and the United States still ongoing, a close aide of US President Donald Trump has claimed that a potential bilateral deal collapsed because Prime Minister Narendra Modi did not personally reach out to Trump.
US Commerce Secretary Howard Lutnick said he had “set a deal up” with India, but it failed to get final approval because Modi did not call the US President. Speaking on a podcast with entrepreneur Chamath Palihapitiya, Lutnick recalled that he insisted on a direct conversation between the two leaders before finalising the agreement.
“It’s all set up, but I said I’ve got to have Modi call the President. They were uncomfortable doing it, so Modi didn’t call,” Lutnick said.
He added that India and the US were very close to concluding the deal but claimed New Delhi was “on the wrong side of the see-saw” during negotiations.
Lutnick also noted that the US went on to finalise trade agreements with countries such as Indonesia, Vietnam and the Philippines, even though the India deal was expected to be completed first. “India’s deal was going to be done before them. I negotiated with them at a higher rate,” he said.
The remarks come amid renewed tensions after Trump recently hinted at raising tariffs on India if New Delhi failed to cooperate on what he described as the “Russian oil issue”.
“India wanted to make me happy. Modi is a very good guy and he knew I was not happy. And it was important to make me happy. We can raise tariffs on them very quickly,” Trump said.
50% tariffs and India’s ‘no deadline’ stance
The US imposed 50% tariffs on Indian goods in August last year, citing India’s continued energy trade with Russia. Since then, Washington has sought to use the steep duties as leverage to push New Delhi to cut back on Russian oil imports.
India, however, has consistently maintained that its energy purchases are driven by market conditions and domestic consumer needs. In October, Union Minister Piyush Goyal made it clear that India would not negotiate trade deals under pressure.
“We are talking to the United States, of course, but we don’t do deals in a hurry, and we don’t do deals with deadlines or with a gun on our head,” Goyal had said.
Does India face 500% tariffs?
Concerns of an even sharper tariff hike have emerged after US Senator Lindsey Graham claimed that Trump has approved a Russia sanctions bill that could significantly impact India.
The proposed Sanctioning Russia Act of 2025 would require the US President to impose tariffs of at least 500% on all goods and services imported from countries that knowingly trade in Russian-origin uranium and petroleum products.
The legislation is aimed at increasing pressure on Moscow over the war in Ukraine by targeting Russia’s key trading partners, including India.
