A senior advisor to former US President Donald Trump has ignited debate by asserting that a highly anticipated trade agreement between India and the United States fell through due to Prime Minister Narendra Modi’s failure to make a crucial phone call to finalize the arrangement. US Commerce Secretary Howard Lutnick’s comments exacerbate an already tense economic relationship, characterized by significant US tariffs imposed on India in response to its purchases of Russian oil, alongside threats of even more severe penalties. As discussions continue to stall, Lutnick’s statements reveal the underlying diplomatic tensions involved. In a frank conversation with entrepreneur Chamath Palihapitiya, Lutnick claimed he had carefully orchestrated the India-US trade deal, prioritizing it over similar agreements with Southeast Asian countries. However, he lamented that the pivotal step of a direct call from Modi to Trump never occurred, stating, “It’s all set up, but I gotta have Modi call the President… they were uncomfortable doing it, so Modi didn’t call,” expressing disappointment that India found itself “on the wrong side of the see-saw.” He underscored the near completion of the agreement, indicating that the two nations were “very close” to finalizing it, with Lutnick negotiating favorable terms for India before shifting his focus to agreements with Indonesia, Vietnam, and the Philippines.
These remarks come in the wake of Trump’s explicit warnings that linked trade concessions to India’s energy dealings with Russia. While praising Modi as “a very good guy” who “wanted to make me happy,” Trump cautioned that India could face rapid tariff increases if it continued its current course. This sentiment mirrors the 50% tariffs imposed on Indian imports in August 2025, which were directly associated with India’s discounted purchases of Russian oil amid the ongoing conflict in Ukraine. Washington perceives these transactions as bolstering Moscow’s military funding, using tariffs as a tool to compel a reassessment of India’s energy strategy. Lutnick’s revelations frame the stalled trade agreement as a lost opportunity for India to alleviate this economic pressure through enhanced bilateral relations.
