India-US trade deal stalled as Modi did not call Trump: US commerce secretary

US Commerce Secretary Howard Lutnick has said that a trade deal with India did not materialise because Prime Minister Narendra Modi did not call US President Donald Trump.

Also Read: Trump on India's Russian oil purchases: 'Modi knew I wasn't happy'

In an interview with the All-In Podcast on Thursday (January 8), Lutnick explained why the India-US trade agreement has yet to be concluded.

Trump’s trade deal strategy

“I’ll tell you a story about India. I did the first deal with the UK, and we told the UK they had to wrap it up by two Fridays from then. That the train would leave the station after two Fridays, because I have many other countries engaged in negotiations. If someone else moves first, they go first. President Trump does deals like a staircase,” Lutnick said.

“(The) first stair gets the best deal. You can't get the best deal after the first guy,” he said.

Lutnick said Trump does things that way “because that way it incents you to come to the table”.

Call from Modi

He recalled that after the UK deal, everyone asked Trump which country will be next and while the president talked about a variety of countries, “but he names India a couple of times publicly".

“And we were talking (with) India, and we told India, ‘you have three Fridays’. Well, they have to get it done,” he said.

Also Read: India refutes US claim on trade deal, says Modi spoke to Trump 8 times

Lutnick said that while he would negotiate the contracts with the countries and set the whole deal up, "But let's be clear, it's his (Trump) deal. He is the closer. He does the deal. So I said ‘You got to have Modi, it's all set up, you have to have Modi call the President. They (India) were uncomfortable doing it, so Modi didn't call.”

India's missed chance

Lutnick said after that Friday (January 2), the US announced trade deals with Indonesia, the Philippines and Vietnam. He added that Washington was negotiating with other countries and “assumed India was going to be done before them”.

“I have negotiated them at a higher rate. So now the problem is the deals came out at a higher rate. And then India calls back and says, ‘Oh, okay, we are ready’. I said, 'ready for what, it was like three weeks later’,” he said. “I go, ‘Are you ready for the train that left the station three weeks ago?’ So what happened is they just…there's sometimes there's that seesaw, and people are just on the wrong side of the seesaw,” the trade secretary said.

"So what happened is India just was on the wrong side of the seesaw, and it was just they couldn't get it done,” Lutnick said, imitating a seesaw with his hands. “And so what happened is all these other countries kept doing deals, and they're (India) just further in the back of the line,” he said.

Mounting tariff pressure

Lutnick said he wanted the trade deal with India to happen “in between the UK and Vietnam because that's what I negotiate”.

“And they remember, and I remember, and they say, ‘but you agreed’. And I said, ‘then, not now, then’. So that's the problem. India will work it out, but there's a lot of countries and they each have their own deep internal politics, and to get something approved by their parliament… these are deeply complex things,” he added.

Lutnick’s remarks came a few days after Trump said that Modi knew he was unhappy with India's purchases of Russian oil and that Washington could raise tariffs on New Delhi "very quickly".

Also Read: US tariffs on India may rise up to 500% as Trump backs Russia sanctions bill

The threat by the US president came at a time when the two countries were negotiating a bilateral trade agreement.

So far, six rounds of negotiations have been held for that. The pact includes a framework deal to resolve the 50 per cent tariffs on Indian goods entering the US.

(With agency inputs)