‘Modi didn't call’ Trump: On US-India trade deal, Commerce Secretary Lutnick says Delhi ‘on wrong side of see-saw’

Prime Minister Narendra Modi “didn't call” US President Donald Trump when it was needed, said US Commerce Secretary Howard Lutnick, in a podcast, as he revealed the reason behind higher tariffs against India and the delay in the US-India trade deal.

How US negotiate with India?

Lutnick said in an interview on the All-In podcast that Trump is the deal “closer”, but PM Modi didn't call him to discuss the trade deal on time. Revealing the details, Lutnick said India was given a deadline of “three Fridays”.

“We told India you had three Fridays. You put them on a shot clock. Well, they have to get it done because what happens is I have lots of other countries, and when those other countries do their deal, the staircase goes up,” Lutnick said.

He added, “He's [Trump] the [deal] closer. He does the deal. So I said, You've got to have Modi. It's all set up. You have to have Modi call the president.”

But, “they [India] were uncomfortable doing it. So, Modi didn't call…that Friday left...,” he said.

Lutnick revealed that in the following week, a “bunch of deals” were done with Indonesia, the Philippines, Vietnam and Malaysia.

The US, however, had assumed that the deal with India “was going to be done before them” and so, “we negotiated them at a higher rate”, Lutnick.

"So, now the problem is that 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 recalled.

“What happened is, India, just was you know, was on the wrong side of the see-saw...it was just they couldn't get it done when they needed to...so what happens is, all these other countries kept doing deals and they're [India] just further in the back of the line...,” Lutnick said.

India-US trade talks

The trade talks fell apart last year. Trump doubled tariffs on Indian goods in August to 50%, the highest, including a levy of 25% in retaliation for India's purchases of Russian oil.

Lutnick's remarks came after Trump stepped up the pressure for talks with a warning this week that tariffs could rise further unless India curbs its imports of Russian oil.

That step pushed the Indian rupee to a record low and spooked investors waiting for progress in two-way negotiations for a trade deal that remains elusive.

India still seeks a tariff rate between Washington's offers to Britain and Vietnam that had previously been agreed upon, but the offer has expired, Lutnick said.

India's trade ministry did not immediately respond to news agency Reuters' emailed request for comment on Lutnick's remarks.

Reuters reported that New Delhi and Washington were very close to a trade deal last year, but a communication breakdown led to the collapse of any potential pact.

It cited an Indian government official involved in the talks as saying that Modi could not have called Trump, for fear that a one-sided conversation would put him on the spot.

(With inputs from agencies)