India’s efforts to finalize a trade agreement with the United States hit a critical snag when Prime Minister Narendra Modi refrained from making a decisive phone call to President Donald Trump, according to U.S. Commerce Secretary Howard Lutnick.
After the negotiations collapsed last year, President Trump imposed a 50% tariff on Indian exports, the highest globally, along with an additional 25% levy, aimed at responding to India’s ongoing purchases of Russian oil.
Lutnick noted that all preparations for the agreement had been completed, but the process required a direct phone call from Modi to President Trump—a step Modi’s side did not take.
The impasse follows escalating pressure from Trump earlier this week, who warned that tariffs could increase unless India reduces its imports of Russian oil. This development sent the rupee to historic lows and further clouded optimism for the long-anticipated trade pact.
Lutnick noted that New Delhi is seeking a tariff rate comparable to what Washington previously extended to Britain and Vietnam—a deal that is no longer available, as the offer has expired.
A report from Reuters, citing a senior Indian official, indicated that India and the U.S. had been on the verge of securing a trade agreement last year.
However, the official stated that Modi refrained from calling Trump out of concern that such a discussion could create an uncomfortable, one-sided exchange and potentially put the Indian prime minister in a vulnerable position during negotiations.
Besides India, other major economies that have not finalized the trade agreement with the U.S. include Brazil, Canada, and Mexico.
As for China, it has reached an agreement with the U.S. under which the U.S. lowered tariff rates until November 10. However, the two countries have yet to finalize a comprehensive deal. Currently, the total U.S. tariff rate on Chinese goods stands at 47%, while China’s tariff rate on U.S. goods is 32%.
