US Blames India for Failed Trade Deal, India Disputes Claim

US Blames India for Failed Trade Deal, While India Disputes the Claim

In a recent episode of the 'All-In' podcast released on Friday, January 9th, US Commerce Secretary Howard Lutnick revealed that the failure to reach a trade agreement between the United States and India last year was attributed to Indian Prime Minister Narendra Modi not making a phone call to President Donald Trump. Lutnick stated that Washington had set three consecutive 'Fridays' as deadlines for finalizing the deal, emphasizing that direct communication between Modi and Trump was essential.

Contrary to expectations, trade deals with Vietnam and Indonesia were successfully concluded before any progress could be made with India. According to Lutnick, all preparations were in place, but New Delhi hesitated to arrange the call. 'So, I said, Modi has to call the President, everything is ready, but they are not willing to do that. Modi didn't make the call,' he remarked.

However, this claim was promptly disputed by Indian Ministry of External Affairs spokesperson Randhir Jaiswal later the same day. Addressing reporters in New Delhi, Jaiswal clarified that India and the US had come close to reaching a trade agreement multiple times. Moreover, Modi and Trump held eight phone conversations last year alone.

The failure to reach an agreement has cast a shadow over US-India relations. Notably, India remains among the major economies yet to conclude such a deal with the US. Tensions were heightened when President Trump announced a 50% tariff on Indian goods in August last year—the highest rate imposed on any Asian nation. This move was partly in response to India's increased purchases of discounted Russian oil following Moscow's invasion of Ukraine.

Despite several rounds of trade negotiations and four telephone conversations between Modi and Trump since September last year, no timeline has been set for finalizing a trade agreement. Both countries continue to navigate through complex diplomatic relations, with the US expressing dissatisfaction over unresolved trade issues.