Trade negotiations between India and the United States collapsed last year after Prime Minister Narendra Modi failed to place a phone call to then US President Donald Trump, according to US Commerce Secretary Howard Lutnick. The proposed agreement, aimed at easing trade barriers between the two countries, ultimately fell apart in 2025.
Lutnick said that by August 2025, President Trump responded to the stalled talks by doubling tariffs on Indian imports to 50 percent, the highest imposed on any country. The measures included a 25 percent tariff linked to India’s continued purchases of Russian oil.
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Speaking on the All-In podcast, a US-based show focused on business and technology, Lutnick claimed that negotiations were essentially finalized but stalled at the last moment. “Everything was ready, but Modi needed to call the President. They were hesitant, so it didn’t happen,” he said.
The issue has resurfaced this week as Trump renewed pressure on New Delhi, warning that tariffs could increase further unless India curtails its imports of Russian oil. The renewed threat has unsettled markets, contributing to the Indian rupee falling to record lows and increasing investor anxiety over the absence of progress on the long-discussed trade deal.
Lutnick added that India had been seeking tariff terms positioned between Washington’s trade agreements with Britain and Vietnam, but that window of opportunity has now closed.
Indian officials have not issued an immediate response to the remarks. However, reports suggest that Prime Minister Modi may have avoided the call to prevent an uncomfortable and potentially one-sided conversation with President Trump.
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