India’s trade negotiations with the United States stalled after Prime Minister Narendra Modi did not call President Donald Trump to finalise the agreement, Commerce Secretary Howard Lutnick said on Friday. The talks broke down last year when Trump raised tariffs on Indian goods to 50%, among the highest rates globally, including a 25% levy imposed in response to India’s continued purchases of Russian oil. Lutnick made the remarks on the All-In Podcast following Trump’s warning that further tariff increases could follow unless India curbed its Russian imports.
Lutnick Blames Communication Breakdown
Howard Lutnick said he had structured the trade agreement but insisted that Prime Minister Narendra Modi personally call the US president to finalise it. According to Reuters, New Delhi and Washington were close to sealing a deal last year before a communication breakdown caused negotiations to collapse. An Indian official involved said Modi chose not to make the call over concerns it could turn into a one-sided exchange that would put him on the spot. Lutnick added that India was given a narrow deadline, referred to as “three Fridays,” to conclude talks, but after missing the window, the United States proceeded with agreements involving Indonesia, the Philippines, and Vietnam at higher tariff rates. When India later re-entered discussions, Lutnick said it had fallen further back in the negotiating queue.
Tariffs And Russian Oil Tensions
President Donald Trump has made clear he is unhappy with India’s continued purchases of Russian oil, warning that tariffs could rise “very quickly” if the issue is not addressed. Negotiators held six rounds of talks in an effort to craft a framework deal that would ease the 50% tariffs facing Indian goods entering the United States. Commerce Secretary Howard Lutnick said he wanted to slot an India agreement between deals with the United Kingdom and Vietnam, but the window closed. Trump has since intensified pressure on New Delhi, tying any progress in talks to India cutting back its Russian oil imports. India is now the world’s third-largest buyer of Russian crude, snapping up supplies at discounted prices.
Indian Perspective And Next Steps
An Indian government official said Prime Minister Narendra Modi could not risk a one-sided phone call with the US president, with officials in New Delhi prioritising the avoidance of potential political embarrassment. After the United States moved ahead with trade agreements with other countries at higher tariff rates, India sought to re-enter negotiations. Commerce Secretary Howard Lutnick said he had hoped to conclude an India deal this year, but pressure has persisted as President Donald Trump continues to take a firm stance on India’s purchases of Russian oil. A framework for a bilateral trade agreement remains pending.
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