US-India Trade Deal Stalled Because Modi Didn’t Call Trump, Commerce Chief Says

A proposed trade deal between the United States and India stalled because Indian Prime Minister Narendra Modi did not call U.S. President Donald Trump to finalize it, according to U.S. Commerce Secretary Howard Lutnick.

During a Jan. 8 episode of the “All-In” business podcast, Lutnick described Trump’s approach to negotiations as a “staircase,” where “the first stair gets the best deal.”

Lutnick said India was the second country, after the United Kingdom, to enter negotiations with Washington for a trade agreement, and that the U.S. side gave New Delhi “three Fridays” to close the deal. His job, Lutnick said, was to negotiate the terms and structure the agreement, but Trump was the one who closed such deals, something he said would require a direct call from Modi.

“I said [to the Indian officials], ‘It [the deal] is all set up; you’ve got to have Modi call the president,'” Lutnick told host Chamath Palihapitiya. “They were uncomfortable doing it, so Modi didn’t call.”

He said that after India hesitated, the United States went on to close “a bunch of” agreements with other countries, including Indonesia and Vietnam.

According to Lutnick, Indian officials later returned to say they were ready to accept the original offer, but by then, the window of opportunity had closed.

“Later New Delhi called Washington and said, ‘Okay, we’re ready,'” Lutnick recounted. “And I said, ‘Ready for what? You’re ready for the train that left the station three weeks ago?'”

India has disputed Lutnick’s account of why the deal failed to materialize.

At a regular press briefing on Jan. 9, the Ministry of External Affairs said Lutnick’s characterization of the discussions between New Delhi and Washington was “not accurate.”

“India and the U.S. were committed to negotiating a bilateral trade agreement as far back as 13 February last year,” ministry spokesperson Randhir Jaiswal told reporters.

“Since then, both sides have held multiple rounds of negotiations to arrive at a balanced and mutually beneficial trade agreement.

“On several occasions, we have been close to a deal.”

Jaiswal also noted that Modi and Trump spoke by phone eight times last year, covering “different aspects of our wide-ranging partnership.”

The United States and India appeared to have a strong start in early 2025, when Modi visited the White House shortly after Trump’s second inauguration. The two leaders at that time pledged to work toward a deal aimed at closing the United States’ $45.8 billion trade deficit with India, and New Delhi signaled it would buy more U.S. energy, weapons, and civil nuclear technology as part of that effort.

In the months that followed, however, the relationship grew more complicated as the two nations faced a range of issues, including the 2025 conflict between India and Pakistan, India’s purchases of heavily sanctioned oil from Russia, the U.S. policy shift on H-1B visas, and disagreements over access to India’s sensitive agriculture and dairy sectors.

After the trade deal stalled, the Trump administration imposed 50 percent tariffs on Indian goods in August 2025—among the highest rates applied to any U.S. trading partner. That included a 25 percent baseline tariff and an additional 25 percent penalty for buying Russian oil, which the White House said was indirectly funding Moscow’s war against Ukraine.

The trade talks have nonetheless resumed, with the most recent round concluded in December 2025, led by U.S. Deputy Trade Representative Rick Switzer in New Delhi. But there is still no clarity on whether an agreement might be reached any time soon.