New Delhi | January 9, 2026

The much-anticipated India–US trade deal could not be concluded because Prime Minister Narendra Modi did not call President Donald Trump, according to US Commerce Secretary Howard Lutnick. Speaking on the All-In Podcast, Lutnick explained that while the Trump administration was eager to secure an early trade agreement with India, New Delhi was reportedly reluctant to engage at the highest leadership level, which led to the deal falling through.

“It was all set up. But you had to have Modi call President Trump. They [India] were uncomfortable doing it. So Modi didn’t call,” Lutnick said, describing the missed opportunity as a timing and leadership issue. He noted that despite several rounds of negotiation, including visits by senior US trade officials, the deal could not be formalized within the timeframe set by Washington.

The Staircase Approach

Lutnick outlined that the Trump administration had adopted a so-called “staircase” approach to trade agreements. After completing a deal with the United Kingdom in May 2025, the US sought to negotiate agreements with other key partners, including India. Under this approach, countries that concluded agreements earlier received lower tariff rates, while those signing later were offered progressively higher rates.

India was reportedly given three weeks—“three Fridays” as Lutnick put it—to finalize the agreement. However, the Indian side’s hesitancy to have the Prime Minister personally call Trump reportedly delayed the finalization of the deal, allowing other Asian countries such as Vietnam, Indonesia, and the Philippines to conclude their agreements in the interim.

“Because we negotiated these deals and assumed India was going to be done before them, I negotiated them at a higher [tariff] rate. So now the problem is that the deals came out at a higher rate. And India calls back and says, ‘okay we’re ready’. And I said, ‘ready for what? It was three weeks too late,’” Lutnick explained.

Trade Talks and Deadlines

Formal trade negotiations between India and the US began in February 2025, with several rounds of in-person discussions held over the course of the year. In December, a team led by Deputy US Trade Representative Rick Switzervisited India to advance the talks. Despite these efforts, no agreement could be finalized, leaving the earlier negotiated framework effectively nullified.

Lutnick stated that the initial deal previously negotiated between India and the US was no longer on the table. “They couldn’t get the deal done when they needed to. What happened is that all these countries kept doing deals, and they [India] were just further in the back of the line,” he said. He added that India would have to re-enter negotiations afresh, noting that the previous arrangements could not simply be reinstated.

Impact of Tariffs

In the absence of a concluded trade agreement, the Trump administration’s 50% tariff on Indian goods continues to be applied. This includes a 25% tariff penalty on imports of Russian energy, highlighting the potential economic cost of the missed deal. For Indian exporters, this has meant higher tariffs and reduced competitiveness in the US market, a significant challenge for industries heavily reliant on transatlantic trade.

The US Commerce Secretary emphasized that the deal’s delay was primarily due to missed timing and lack of direct engagement from the Indian leadership, rather than disagreements over technical or commercial terms. “They [India] were uncomfortable doing it. So Modi didn’t call. That’s why the deal wasn’t done in time,” he said.

Reactions and Next Steps

There was no immediate response from Indian officials to Lutnick’s comments. Analysts suggest that the statement could increase pressure on the Indian government to engage more proactively at the leadership level in future bilateral trade negotiations, particularly with the US.

The comments also underscore the high-stakes nature of international trade negotiations, where timing, protocol, and personal engagement at the highest levels can determine whether a deal succeeds. In this case, Lutnick’s remarks suggest that personal diplomacy from heads of state was seen as a critical factor in securing India’s deal in time.

While the US has moved ahead with agreements with other Asian countries, including Vietnam and Indonesia, India’s trade team will now have to reassess its strategy and re-engage with US counterparts to negotiate terms acceptable to both sides. The broader implications of the missed agreement, particularly in terms of tariffs and market access for Indian exporters, are likely to shape bilateral economic relations in 2026 and beyond.

Conclusion

The revelation by US Commerce Secretary Lutnick sheds new light on the behind-the-scenes challenges of the India–US trade negotiations. According to him, the failure to conclude the deal was not due to technical disagreements but reluctance on the Indian side to have a direct call between Prime Minister Modi and President Trump. This missed opportunity has left India at a disadvantage in terms of preferential tariff rates, while other countries have moved ahead with agreements, highlighting the critical role of leadership-level engagement and timing in international trade diplomacy.

As both countries continue discussions on trade, the focus is expected to shift toward re-negotiating the agreement under new timelines while addressing the implications of existing tariffs on bilateral commerce.

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