US Commerce Secretary Howard Lutnick has blamed Prime Minister Narendra Modi for the India-US trade deal to have fallen through last year, saying PM Modi did not call US President Donald Trump because “they [India] were uncomfortable doing that”.
In an interview podcast on Thursday, Lutnick gave a detailed version of the events leading up to a stand-off between the two countries as negotiations for the proposed bilateral trade agreement (BTA) stalled and Trump imposed additional tariffs of 25 per cent on Indian exports as a punitive measure for buying Russian oil.
“I’ll tell you a story about India. I did the first deal with the UK, and we told the UK that they had to get it done by two Fridays from now. That the train was going to leave the station by two Fridays, because I have a lot of other countries doing things, and you know, if someone else is first, they’re first. President Trump does deals like a staircase,” Lutnick said, adding that the “first stair gets the best deal”.
“You can’t get the best deal after the first guy,” he said and explained that Trump does things this way “because that way it incents you to come to the table”.
After the US-UK deal was finalised, Lutnick said Trump publically named India as the next country he intended to do a deal with.
“And we were talking (with) India, and we told India, ‘you have three Fridays’. Well, they have to get it done,” Lutnick said, and shared that while he negotiates the contracts with countries, it is Trump who closes the deal since it’s “his deal”.
That’s where things began to unravel, claims Lutnick, who said India was “uncomfortable” in calling Trump up.
“Let’s be clear, it’s his [Trump’s] 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.”
The US then announced trade deals with Indonesia, the Philippines and Vietnam, which Lutnick claims were all sealed at higher rates.
“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, adding, “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.”
Lutnick went on to say that since India was “on the wrong side of the seesaw”, the countries successfully conducted deals with the US while India was “just further in the back of the line”.
The trade secretary said India’s pleas reminding him of agreeing to the contract fell on deaf ears. “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 claimed that Modi knew he was unhappy with India’s purchases of Russian oil and that Washington could raise tariffs on New Delhi “very quickly”.
India and the US continue their negotiations on the BTA, which has so far seen six rounds of negotiations held. The pact includes a framework deal to resolve the 50 per cent tariffs on Indian goods entering the US.
