Washington/Dhaka — A proposed trade agreement between India and the United States collapsed after Indian Prime Minister Narendra Modi did not place a final phone call to US President Donald Trump, according to US Commerce Secretary Howard Lutnick.
Speaking on the US business and technology podcast All-In on Friday, Lutnick said negotiations had reached an advanced stage and all preparations were complete. However, he claimed the deal required a direct call from Modi to Trump to finalize it—one that never came. Lutnick suggested New Delhi was uncomfortable with the process, leading to the breakdown.
Reuters reported that India and the US were close to sealing the agreement last year, but talks fell apart at the last moment due to a lack of direct communication. An Indian government official, speaking on condition of anonymity, said Modi was hesitant to engage in a one-on-one phone conversation with Trump, fearing the US president could impose tough, one-sided conditions.
India’s Ministry of Commerce did not immediately respond to requests for comment.
Following the failure of the talks, President Trump doubled tariffs on Indian goods to 50 percent in August last year—among the highest tariff rates globally. The increase included an additional 25 percent levy imposed in response to India’s continued imports of Russian oil.
Trump has since warned that tariffs could rise further if India does not reduce its oil purchases from Russia. The hardline US stance has weighed on the Indian economy, pushing the rupee to a record low and unsettling investors who had been anticipating a long-term trade agreement.
Lutnick added that India is now seeking a tariff framework positioned between the offers the US has extended to the United Kingdom and Vietnam. Although Washington had previously proposed such a structure, he said the offer has since expired.
