US Commerce Secretary Howard Lutnick has made striking claims about why a trade deal between the United States and India failed to materialize, attributing the breakdown to Prime Minister Narendra Modi's decision not to call President Donald Trump. The revelation came during Lutnick's appearance on the All-In Podcast, hosted by four Silicon Valley venture capitalists and entrepreneurs.

The Failed Communication

According to Lutnick, the trade negotiations had reached a critical juncture where a direct conversation between the two leaders was necessary to close the deal. "Let's be clear, it's his (Trump's) deal. He is the closer. He does it. It's all set up, you got to have Modi, call the President," Lutnick explained during the podcast interview.

The Commerce Secretary indicated that Indian officials were "uncomfortable" with arranging the call, leading to Modi ultimately not making contact with Trump. This hesitation proved costly for India's negotiating position.

Consequences of the Delay

The timing of India's reluctance had significant implications for the broader US trade strategy. Lutnick revealed that his team had been negotiating with multiple countries simultaneously, operating under the assumption that India would finalize its agreement first.

"We negotiated with them and assumed that India is going to be done before them and negotiated with them at a higher rate," Lutnick stated, referring to the other countries. When India failed to act, the US proceeded to announce deals with Indonesia, the Philippines, and Vietnam the following week.

India's Missed Opportunity

The delay created a problematic situation when India eventually expressed readiness to proceed. Lutnick described the awkward position this created: "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?!"

Approximately three weeks after the original deadline, Indian officials approached the US team about moving forward. However, Lutnick's response was pointed: "Are you ready for the train that left the station 3 weeks ago?" This exchange highlighted how the window of opportunity had closed.

Current Trade Situation

The failed negotiations have left India in a challenging position regarding trade with the United States. Currently, India's exports to the US attract a 50% tariff rate, reflecting the absence of a more favorable trade agreement that might have been achieved through successful negotiations.

Lutnick's comments provide insight into the high-stakes nature of international trade negotiations and the critical importance of timing and political communication in securing favorable terms. The revelation also underscores how diplomatic protocols and comfort levels with direct leader-to-leader communication can significantly impact economic outcomes between nations.

US Commerce Secretary Howard Lutnick has made striking claims about the stalled India-US trade negotiations, attributing the lack of progress to Prime Minister Narendra Modi's decision not to personally call President Donald Trump. The comments shed light on the diplomatic dynamics that may have influenced one of the most significant potential trade agreements between the two nations.

Trade Deal Breakdown

Lutnick revealed in a recent interview that despite his efforts to facilitate the agreement, the deal required crucial leader-to-leader political signaling that ultimately did not occur. His specific observations about the negotiation process highlight the importance of personal diplomacy in high-stakes international trade discussions.

"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," Lutnick stated, emphasizing that India appeared hesitant about the direct diplomatic approach required to finalize the agreement.

Russia Sanctions Legislation

The timing of Lutnick's comments coincides with significant developments in US foreign policy. Trump has approved bipartisan Russia sanctions legislation that grants sweeping presidential authority to penalize Russia's trading partners, including India, China, and Brazil, specifically targeting their purchases of Russian oil.

The legislation, authored by Republican Senator Lindsey Graham and Richard Blumenthal, establishes severe economic consequences for continued Russian energy trade:

Strategic Implications

The sanctions bill represents a significant escalation in economic pressure tactics, with Graham stating it would provide President Trump "tremendous leverage against countries like China, India and Brazil" to incentivize them to cease purchasing Russian energy products. The legislation specifically targets what officials describe as "cheap Russian oil that provides the financing for Putin's bloodbath against Ukraine."

Pending Legal Developments

A US Supreme Court ruling on the legality of Trump's tariffs remains pending, with substantial financial implications at stake. If the court deems the tariffs "illegal," the US government could face requirements to refund nearly $150.00 billion to importers, representing one of the largest potential trade-related refunds in recent history.

Government Response

The Indian government has not yet responded to Lutnick's characterization of the trade deal negotiations or his claims about the diplomatic requirements that allegedly prevented the agreement's completion. The absence of an official response leaves questions about India's perspective on both the trade negotiations and the new sanctions legislation that could significantly impact bilateral economic relations.