US Commerce Secretary Howard Lutnick has claimed that the proposed India–US trade deal did not materialise because Prime Minister Narendra Modi did not personally call US President Donald Trump.
"I set the deal up. But you had to have Modi call President Trump. They (India) were uncomfortable with it. So, Modi didn't call," said Lutnick in a podcast.
Lutnick, speaking in the All-In Podcast, hosted by four Silicon Valley venture capitalists and entrepreneurs, said that they had negotiated with other countries earlier, assuming that the deal with India will happen earlier.
"We did trade deals with Indonesia, the Philippines, and Vietnam. We assumed a trade deal with India before them. So, now the problem is that the deals came out at a higher rate and then India claws back," said Lutnick.
"Lets be clear, its his (Trump's) deal. He is the closer. He does it. Its all set up, you got to have Modi, call the President. They were uncomfortable doing it. So, Modi didn't call. That Friday left, in the next week we did Indonesia, the Philippines, Vietnam, we announced a whole bunch of deals. Because we negotiated with them and assumed that India is going to be done before them and negotiated with them at a higher rate. So now the problem is, that the deals came out at a higher rate and then India claws back and says oh okay, we are ready. I said ready for what?!" the US Commerce Secretary said.
The trade talks fell apart last year and Trump doubled tariffs on Indian goods in August to 50%, the world's highest rate, including a levy of 25% in retaliation for India's purchases of Russian oil.
Lutnick also claimed that the conditions under which India and the US appeared to close the trade deal were no longer on the table. "The US has stepped back from that trade deal that we had agreed to earlier. We are not thinking about it anymore," Lutnick said.
"You know, it was like 3 weeks later. I go, "Are are you ready for the train that left the station three weeks ago?" Lutnick added.
India still seeks a tariff rate between Washington's offers to Britain and Vietnam that had formerly been agreed but the offer has expired, Lutnick added.
Indian government is yet to react to Lutnick's comments.
Lutnick's comments come a day after US President Donald Trump has approved the bipartisan Russia Sanctions Bill that gives sweeping authority to the president to penalise Russia's trading partners, including India, China and Brazil, over their purchase of Russian oil.
The bipartisan legislation, penned by Republican Senator Lindsey Graham and Richard Blumenthal, would require the US to impose a 500% tariff on all goods imported from any country that continues to purchase Russian oil, petroleum products or uranium.
He said the bill would give President Trump "tremendous leverage against countries like China, India and Brazil" to incentivise them to stop buying the cheap Russian oil that "provides the financing for Putin's bloodbath against Ukraine".
Meanwhile, an US Supreme Court ruling on the legality of Trump's tariffs is awaited. If deemed "illegal", the US government could be forced to refund nearly $150 billion to importers.
Trump, speaking to reporters on Sunday, said that Prime Minister Narendra Modi knew he was unhappy with India's purchases of Russian oil and that Washington could raise tariffs on New Delhi "very quickly."
After recording negative growth for two consecutive months, India's merchandise exports to the US rose 22.61% to $6.98 billion in November despite the steep tariffs on domestic goods.
During the April-November period of this fiscal year, the country's exports to the US increased 11.38% to $59.04 billion, while imports rose 13.49% to $35.4 billion.
The threat by the US President came at a time when the two countries were negotiating a bilateral trade agreement. So far, six rounds of negotiations have been held for that. The pact includes a framework deal to resolve the 50% tariffs on Indian goods entering America.
On December 23 last year, Commerce Secretary Rajesh Agrawal said India is actively engaged in trade discussions with the US, and hopes to conclude the talks "sooner than later" in a manner that restores deeper market access for domestic exporters.
US Deputy Trade Representative Rick Switzer was recently in New Delhi with his team to take stock of these talks. The latest round of two-day talks concluded on December 11, 2025.
The Indian industry and exporters are eagerly awaiting the conclusion of negotiations and the announcement of a deal, as high import duties are hurting their shipments to America.
Though they are exploring other markets to maintain their export profits, the US remains a key destination for them, accounting for about 18% of their exports.
As part of the pact, the US is seeking duty concessions on agricultural products such as almonds, corn, and apples, as well as on industrial goods. India has strongly opposed any concessions in the agri and dairy sectors. India has stated that it will not compromise the interests of farmers and MSMEs.
In February 2025, leaders of the two countries directed officials to negotiate an agreement. It was planned to conclude the first tranche of the pact by the fall of 2025. The agreement aims to more than double bilateral trade to $500 billion by 2030, from the current $191 billion.
The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at $131.84 billion, including $86.5 billion in exports.
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