India and the United States have been good friends for years, trading goods worth billions. But a big trade agreement almost happened, and now everyone is talking about why it didn't. US Commerce Secretary Howard Lutnick shared a surprising story on January 8, 2026, saying Prime Minister Narendra Modi did not call President Donald Trump to seal the deal. This news from Lutnick's chat on the All-In Podcast has sparked debates across the world. Let's break it down simply, like telling a story to a friend, with all the background you need to understand the full picture.
Why Didn’t PM Modi Call Donald Trump? US Commerce Secretary Drops Big Hint
New Delhi / Washington, Jan 9, 2026 – In a major diplomatic revelation that’s now trending in global politics and economics, United States Commerce Secretary Howard Lutnick said the long-awaited India–US trade deal stalled because Prime Minister Narendra Modi did not call former U.S. President Donald Trump at a crucial moment during negotiations.
Lutnick’s comments — made on the All-In Podcast this week — have sent shockwaves through business communities, political analysts and international trade observers. They offer a rare window into how personal diplomacy and communication between world leaders can shape billion-dollar agreements.
Who is Howard Lutnick, US Commerce Chief?
Picture a Wall Street survivor turned government leader. Born in 1961, Lutnick leads Cantor Fitzgerald, a firm hit hard on 9/11 – he lost 658 colleagues but rebuilt it into a powerhouse. Trump picked him as Commerce Secretary in February 2025 after Senate approval.
At 64, he's a tariff fan, matching Trump's style. He handles trade pacts, jobs, tech, and oceans for America. Lutnick co-chaired Trump's 2024 transition, filling thousands of roles. Time magazine named him influential in 2025. His podcast words carry weight because he negotiates daily.
Lutnick's straight talk, like calling deals a "staircase," makes complex trade feel like a game plan anyone can grasp.
The Big Statement: What Did the US Commerce Secretary Say?
- Lutnick said that all major parts of the trade deal were ready, but one key step was missing — a direct call from PM Modi to Trump.
- • He explained that “You had to have Modi call the President. They were uncomfortable, so Modi didn’t call,” and that this lack of communication helped derail the deal.
- • Lutnick said the U.S. expected India’s deal to be completed even before agreements with Indonesia, Vietnam, and other countries — but that didn’t happen.
This explanation has now become the most discussed reason for why the much-talked-about *India–US trade pact remains unfinished.
India-US Trade Talks: Timeline Unfolded
Trade between India and US hit $120 billion last year, with India exporting textiles, pharma, and gems. Trump entered office in January 2025 pushing "America First" tariffs to fix imbalances – US exports less to India. Early 2025, PM Modi directed talks for a first deal by November.
By March, Commerce Minister Piyush Goyal said progress was smooth. Six rounds happened, aiming to double trade to $500 billion by 2030. But tariffs loomed: base 25% plus 25% extra on Indian goods for buying cheap Russian oil post-Ukraine war. Trump paused some in 90 days, but deadlines passed.timesofindia
Fall 2025 brought hopes – interim pact eyed before tariff hikes. Social media showed Modi and Trump calling each other friends. Yet, no final ink. Lutnick's story fills the gap: no leader call, no close. January 2026 sees stalled pacts amid 50% duties hurting exporters.
Deep dive: India's red lines on dairy, farm openings clashed with US asks. Russian oil saved India billions amid high prices, but fueled US anger – refiners like Reliance kept buying. Senator Graham even floated 500% penalties.
Why Didn’t PM Modi Make the Call?
The exact reasons for why Modi did not call Trump are not fully detailed by official Indian government sources. U.S. remarks suggest:
- Indian officials were “uncomfortable” with the timing
- A lack of direct political outreach may have slowed progress
- The absence of the phone call sent mixed diplomatic signals
Indian authorities have not officially responded to Lutnick’s claim as of this writing.
Important: While this is a strong statement from the U.S., it’s only one side of a complex diplomatic negotiation — and diplomats often keep deeper reasons private.
Why Russian Oil Tariffs Hit India Hard
Russia's war in Ukraine made oil skyrocket. India, world's third-biggest buyer, grabbed discounted crude – 40% of imports now Russian. This cut costs for folks at pumps but irked Trump, who sees it funding Moscow.
Trump warned on Air Force One January 2026: curb buys or face quick tariff jumps. US slapped 50% on Indian items, highest globally. Impacts? Pharma firms pay more, textiles lose edge, jobs at risk in Surat or Tirupur.
India argues energy security – can't switch overnight. Alternatives cost extra, hitting growth. Lutnick's miss ties here: oil row made leaders cautious on calls.
What's Next for India-US Trade Deal?
India eyes Vietnam-style terms. More rounds likely post-Lutnick's nudge. Trump wants wins fast; Modi balances voters. Possible concessions: easier US visas, defense buys. Watch for Modi-Trump meet at G20.
Tariffs could ease if oil dips. Economists say deal boosts GDP 0.5%. Exporters push government.
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