The proposed trade deal between India and the United States did not materialise because Prime Minister Narendra Modi did not call US President Donald Trump, the country’s Commerce Secretary Howard Lutnick claimed on Friday.

Speaking on a podcast hosted by American venture capitalist Chamath Palihapitiya, Lutnick said that he had set up the deal but finalising it required Modi to call Trump directly.

Lutnick claimed that India was “uncomfortable” with this step and that the call never happened. The US moved on and concluded trade deals with other countries, he added.

“I set the deal up,” he said. “But you had to have Modi call President Trump. They were uncomfortable with it. So, Modi didn’t call.”

He said that the US had assumed that the agreement with India would be completed before agreements with Indonesia, the Philippines and Vietnam. The negotiations with those countries were conducted on that assumption, he added.

“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,” Lutnick added. “I said ready for what?”

Lutnick said that the conditions under which India and the US had earlier appeared close to finalising a deal were no longer available. However, he added that “India will work it out”.

Characterisation of talks in remarks ‘not accurate’, says MEA

Responding to Lutnick’s remarks, Ministry of External Affairs Spokesperson Randhir Jaiswal said on Friday that the characterisation of the trade discussions in the reported remarks “is not accurate”.

India and the US “were committed” to negotiating the bilateral trade agreement since February 13, 2025, Jaiswal said, adding that the two sides have held multiple rounds of negotiation “to arrive at a balanced and mutually-beneficial” trade deal.

“On several occasions, we have been close to a deal,” he said.

“We remain interested in a mutually-beneficial trade deal between two complementary economies and look forward to concluding it,” the ministry spokesperson said. “Incidentally, prime minister [Modi] and President Trump have also spoken on phone on eight occasions during 2025, covering different aspects of our wide-ranging partnership.”

The comments by Lutnick on Friday came amid trade tensions between the two countries.

Without a trade deal with Washington, Indian goods are facing a combined US tariff rate of 50%. A 25% so-called reciprocal duty was imposed on August 7, followed by an additional 25% punitive levy on August 27.

The punitive tariffs were introduced as part of Trump’s pressure campaign against countries purchasing discounted oil from Russia amid Moscow’s war on Ukraine.

On November 10, Trump said that Washington will bring down the tariffs imposed on India “at some point” and claimed that New Delhi has substantially reduced its purchase of Russian oil. He also said that his country was getting close to a “fair deal” with India.

While India’s external affairs ministry had not commented on Trump’s claim, it has maintained that ensuring stable energy prices and secure supplies were the goals of the country’s energy policy.

After the punitive levies were announced, New Delhi had said it was “extremely unfortunate” that the US had chosen to impose additional tariffs on India “for actions that several other countries are also taking in their own national interest”.

Six rounds of negotiations have been held so far on a proposed bilateral trade agreement, Moneycontrol reported on Friday.

On December 15, Commerce Secretary Rajesh Agrawal said that India and the US are “very close” to finalising an initial trade agreement on tariffs, but he did not specify a deadline.

Lutnick’s remarks on Friday also followed Trump’s approval of a Russia sanctions bill that could pave the way for tariffs of up to 500% on countries such as India for buying Russian oil. The bill could be put to vote in the Congress next week.