US Commerce Secretary, New Delhi give differing accounts of breakdown in India trade talks

India's trade pact with the United States stalled last year because Prime Minister Narendra Modi did not make a telephone call to President Donald Trump ahead of a deal, Commerce Secretary Howard Lutnick said on Friday, giving an account of events that New Delhi has denied.

Trade talks between India and the U.S. fell apart and Trump then doubled tariffs on Indian goods in August to 50%, the world's highest rate, including a levy of 25% in retaliation for India's purchases of Russian oil.

"It's all set up and you have got to have Modi call the President. And they were uncomfortable doing it," Lutnick said in an interview on the All-In podcast, a U.S. show by four venture capitalists that focuses on business and technology.

"So Modi didn't call."

Responding to Lutnick's remarks, India's foreign ministry said the "characterisation of these discussions in the reported remarks is not accurate."

The two nations have been close to a deal on several occasions since the agreement to negotiate in February last year, Indian foreign ministry spokesperson Randhir Jaiswal told reporters at a media briefing on Friday.

"Incidentally, Prime Minister and President Trump have also spoken on phone on eight occasions during 2025, covering different aspects of our wide-ranging partnership.”  

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

The failure to reach a deal has pushed the Indian rupee to a record low and spooked investors waiting for progress in two-way negotiations.

India is still seeking a tariff rate between Washington's offers to Britain and Vietnam that had formerly been agreed but the offer has expired, Lutnick added.

India's trade ministry did not respond to an e-mailed request for comment on Lutnick's remarks.

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, Reuters reported.

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.