In a revealing interview on the All-In Podcast today, January 9, 2026, U.S. Commerce Secretary Howard Lutnick made a startling claim: the trade deal between India and United States collapsed because Prime Minister Narendra Modi failed to place a final “closing” phone call to President Donald Trump.
According to Lutnick, the anticipated deal failed to materialize because Prime Minister Narendra Modi did not place a phone call to President Donald Trump during a critical window of negotiations in early 2026.
The “Staircase” Strategy
Lutnick detailed the Trump administration’s “staircase” approach to trade, where countries that finalized agreements early received the most favorable tariff rates.
According to Lutnick, the framework for an Indian trade pact was fully prepared, but it required a leader-level conversation to seal the deal.
“I would negotiate the contracts and set the whole deal up, but let’s be clear. It’s his (Trump’s) deal. He’s the closer. He does it. It’s all set up, you got to have Modi, call the President. They were uncomfortable doing it. So Modi didn’t call. That Friday left, in the next week we did Indonesia, the Philippines, Vietnam, we announced a whole bunch of deals,” US Commerce Secretary said.
He added that while the U.S. waited for New Delhi, it moved ahead with other Asian nations, including Vietnam, Indonesia, and the Philippines, all of whom secured their agreements while India remained “in the back of the line.”
Lutnick’s remarks imply that the White House viewed the absence of a call from PM Modi not just as a diplomatic oversight, but as a lack of urgency or commitment to the deal.
“The President is a deal-maker who values direct engagement,” Lutnick noted, suggesting that a simple phone call could have bridged the remaining gaps in the multi-billion dollar trade pact.
Stalled Ambitions
The trade deal was expected to address long-standing friction points, including:
H-1B Visa Quotas: India had been pushing for more flexibility for its tech professionals.
Agricultural Access: The U.S. sought lower duties on dairy and poultry products entering the Indian market.
Digital Trade: Tensions over data localization and e-commerce regulations were key hurdles that the deal aimed to resolve.
Diplomatic Fallout
This diplomatic breakdown has severe economic implications. Currently, Indian goods are subject to a 50% tariff in the U.S., which includes a 25% penalty specifically targeting India’s continued purchase of Russian oil.
The situation grew even more tense this week as President Trump “greenlit” the Russia Sanctions Bill, a bipartisan piece of legislation that could hike tariffs to a staggering 500% on countries – including India, China, and Brazil – that provide a financial lifeline to Moscow through energy imports.
Reports indicate that New Delhi was “uncomfortable” with the call because of fears it would be a one-sided conversation that could put the Prime Minister in a compromising position.
As of now, the Indian Ministry of Commerce has not issued a formal response to Lutnick’s “missed call” allegation.
