‘Modi didn’t call’: US Commerce Secretary Howard Lutnick on what derailed high-stakes India-US trade deal

Lutnick’s remarks, made during an interview on the All-In podcast on January 9, are significant as they disclose an important detail in the negotiations: India and the US had reached an understanding on a deal, only for US negotiators to backtrack later.

“What I would do is I would negotiate the contracts and set the whole deal up. But let’s be clear, it’s his deal. Yeah, okay, he’s the closer. He does the deal. So I said, ‘You got to have Modi (call). It’s all set up. You have to have Modi call the president.’ They were uncomfortable doing it, so Modi didn’t call,” Lutnick said.

“India just was, you know, on the wrong side of the seesaw…,” Lutnick said. “It was just they couldn’t get it done when they needed to, and then they couldn’t get it done, and then they couldn’t get it done, and then they couldn’t get it done. And so what happened is all these other countries kept doing deals, and they’re just further in the back of the line, and now when they say, but what I want is, I want the deal in between the UK and Vietnam, right? Because that’s what I negotiate, right? And they remember, and I remember they say, but, but you agreed? And I said, then. Not now,” he added.

Notably, the UK on May 8, 2025, was among the first to sign a trade deal, which lowered US tariffs on the UK to 10 per cent, the lowest among all countries globally. The US signed its second trade deal with Vietnam, agreeing to 20 per cent reciprocal tariffs. However, several trade deals signed by the US after Vietnam saw Washington imposing lower tariffs on countries such as South Korea, the EU, Japan and in the ASEAN region. US tariffs continue to be high on the BRICS countries, with the highest 50 per cent on India.

The US, however, did announce comparatively lower tariffs on India on ‘liberation day’. Washington had imposed 27 per cent reciprocal tariffs on India and much higher tariffs on India’s competitors in Asia. The first set of reciprocal tariffs were as high as 54 per cent on China, 46 per cent on Vietnam, 37 per cent on Bangladesh, and 36 per cent on Thailand. Tariffs stood at 32 per cent on Indonesia and 48 per cent on Laos.

At the time when the US and UK announced their trade pact on May 8, India, in response to the terrorist attack by Pakistan-based terrorist group The Resistance Front (TRF) in Pahalgam, launched Operation Sindoor on May 7–8, attacking terrorist installations in Pakistan. Despite Trump’s multiple assertions that US tariffs resulted in a ceasefire between India and Pakistan, New Delhi has maintained that the ceasefire followed a call made by Pakistan’s Director General of Military Operations to his Indian counterpart on May 10.

“If you remember, I did the first deal, the UK, and we told the UK that they had to get it done by two Fridays, that that was the date that the train was going to leave the station by two Fridays. Because I have a lot of other countries doing things, and you know, if someone else is first, the first, and President Trump does deals like a staircase. First stair gets the best deal. You can’t get the best deal. After the first guy went, everyone says, I want the UK deal. I want the UK deal. The answer is, no. They were first. They took the chance. They moved quickest,” he said.

“They’re first, and then the next one’s got to be higher, and then the next one higher, and the next one higher, the next one. So he does things that way, because that way it incentivises you to come to the table, right? You could have three countries who are the second deal. They all get done the same time, right? But you know, if you want to wait and see how it goes, it’s at your risk. So he does the UK deal, and they had to get it done by Friday,” he added.

“So everybody asked the president, who do you think is next? And if you look back at the time, he said he talks about a variety of countries, but he names India a couple of times publicly. It’s not like a big secret. And we were talking India, and we told India, you had three Fridays to get it done,” Lutnick said.

“Because what happens is, I have lots of other countries, and when those other countries do their deal, the staircase goes up and right. And now the president, during all these deals, he would refer to me as the greatest table setter who ever lived. Okay? Because you’ve never had anybody who was as successful as me as a businessman before, who’s just the tables, you know? So because what I would do is I would negotiate the contracts and set the whole deal up. But let’s be clear, it’s his deal,” the US commerce secretary said.

While the US continued to sign multiple trade deals, including with the EU, Japan and Vietnam, a deal with India remained elusive largely due to American demands related to agricultural market access. Ramping up pressure, Trump on August 7 doubled the tariffs on India to 50 per cent.

This further widened differences between the two countries as the US cited India’s purchase of Russian oil for imposing additional tariffs. This was seen as discriminatory, as China was the largest buyer of Russian oil, at about 2 million barrels per day, followed by India (just under 2 million barrels a day) and Turkey. The US had agreed to lower tariffs on Chinese goods to 30 per cent from 145 per cent in May.

“So that Friday left, middle of the next week, we did Indonesia, the Philippines, right? Vietnam, we announced a whole bunch of deals. So we did these whole bunch of deals. So that’s like that staircase, and they were at and because we negotiated them and assumed India was going to be done before them, I had negotiated them at a higher rate. So now the problem is the deals came out at a higher rate, right? And then India calls back and says, Oh, okay, we were ready. I said, ready for what it was like three weeks later. I go, ‘are you ready for the train that left the station three weeks ago?’” Lutnick said.

In the absence of the trade deal, India risks facing fresh tariffs. United States Republican Senator Lindsey Graham, in a social media post, has said that Trump has given a greenlight to the ‘Russia sanctions bill’. The bill proposes 500 per cent tariffs on “all goods and services” imported into the United States from countries that “knowingly engage in the exchange” of Russian-origin uranium and petroleum products.

The reciprocal tariffs currently offer concessions to several products, such as electronics, pharma, coffee, and tea, among other items. The concessions have helped India to continue exporting one of its fastest-growing export items—mobile phones. However, it is unclear if the Russia sanctions bill will have similar concessions. This could widen the impact of US tariffs on all products, including services.