What happened to India-USA Trade Deal?

Why PM Modi of India Did Not Call President Trump?

It has been alleged that Prime Minister Narendra Modi did not personally call President Trump to finalise the trade deal, hence it lapsed. On 9 January 2026, the Commerce Secretary of USA, Howard Lutnick stated that despite the negotiations being nearly complete, the deal lapsed due to a phone call which was not made. He made these remarks on the All-In podcast, saying India was “uncomfortable” with the direct leader-to-leader outreach. He also said that Modi needed to make the call to Trump, described as the “closer” to seal it. India’s Foreign Ministry rejected Lutnick’s account, noting that Modi and Trump spoke by phone eight times in 2025 on various partnership matters.

Now secretly recorded audio of Republican Senator Ted Cruz talking to his ‘donors’ has told that he was “battling” the White House to secure a trade agreement with India. When asked who in the administration was resistant to reaching such accords, Cruz named Navarro, Vance, and “sometimes” Trump himself. The Mystery of no-deal between India and USA deepens. Let us analyze it from psychological point of view.

The Unpredictability Doctrine

President Donald Trump in a March 23, 2016, Bloomberg interview (“With All Due Respect”), hinted at nuclear options against terrorists to maintain unpredictability. He echoed it again during the September 26, 2016, presidential debate, criticizing Hillary Clinton for publicizing her ISIS plans.

In his first major foreign policy speech on April 27, 2016, at the Mayflower Hotel in Washington, D.C., Trump stated: “We must, we must as a nation be more unpredictable. We are totally predictable. We tell everything.”

Therefore, Unpredictability is now the official policy of the USA. What is this unpredictability?

Capricious Behaviour

Capricious is an adjective that describes someone or something that is impulsive, unpredictable, and prone to sudden, unaccountable changes of mood, behaviour, or opinion. A capricious person might make a decision on a whim, then reverse it just as quickly. There are many other words used to define such personalities such as Unpredictable, Whimsical, Fickle, Mercurial, Impulsive, and Changeable.

Dealing with a capricious leader on the international stage is a significant diplomatic and strategic challenge for other nations. A leader’s unpredictability can destabilize regions, disrupt alliances, and increase the risk of miscalculation and conflict. The net question is: How to deal with such a leader?

How to Deal with the Unpredictable?

The primary goal of any leader is to protect one’s own national interests and citizens from potential fallout (economic, military, or political). Therefore, patience is the name of the game. Whatever one may do, the following must be avoided:

1. Depersonalize the Relationship: Frame interactions around state-to-state interests, not leader-to-leader dynamics. Build institutional connections that can outlast the leader’s tenure. Notice how President Trump tries to personalize the relationship by praising Modi and calling him a friend. There was no reciprocation by Modi.
2. Avoid Escalation Based on Emotion: Do not mirror capricious behavior with impulsive reactions. Maintain disciplined, consistent, and principled communication. Trump and his officials keep provoking India. They went to the extent of shouting slurs but India remained cool like a cucumber. No response.
3. Prepare for Multiple Scenarios: Use intelligence and analysis to model various “what-if” scenarios, from sudden policy shifts to provocations. We expect that this is happening behind the scenes. Besides above, India is also doing many things. For example:

Deepen Bureaucratic Ties:

The object is to fortify relationships between ministries of defence, finance, commerce, and foreign affairs.

By strengthening ministry-to-ministry links in defense, finance, commerce, and foreign affairs, India ensures continuity despite leadership volatility, as seen in sustained USA-India defence pacts renewed through 2035 despite trade frictions. This “track-two” diplomacy creates buffers, much like India’s steady QUAD engagements amid Trump tariffs. This creates stability below the leadership level.

Codify Agreements:

India has moved from handshake deals or verbal assurances to formal, detailed treaties and contracts that are harder to unilaterally abandon. Formal treaties lock in commitments, reducing unilateral reversals. A 10-year defense framework, outlasts personal whim.

Modi ignored an invitation to visit USA after G7 summit in Canada. There was no practical reason to meet and commit to a leader who openly announces that he is capricious or unpredictable. When noncommittal is policy, commitment is foolishness.

Engage multiple Power Centers:

Next move is to cultivate relationships with legislators, regional governors, military leaders, and business elites who may provide alternative channels of influence and information.

Recently, a delegation of Senators from USA visited India. Cultivating ties with US legislators (e.g., Cruz), governors, and business leaders diversifies influence channels, bypassing a single capricious figure. Recent examples include lobbying firms securing post-Operation Sindoor meetings and BRICS diversification to hedge US unreliability. This multi-stakeholder approach mirrors India’s RIC outreach to balance Trump-era pressures

Diversify Partnerships:

India has chosen to reduce over-dependence by strengthening ties with other global and regional partners. The trade deals are already in place with UK, UAE, Australia, and New Zealand.

Today India has entered into several agreements with EU including a Free Trade Agreement. This is the list of agreements:

Apart from above there are five more items which are being explored on subject ranging from Humanitarian relief, Green Hydrogen, Science, and Technology, Horizon Space Agreement, and digital innovations.

Why Modi Did Not Call?

An unpredictable or capricious person is not reliable and must be kept at a distance. This is popular wisdom of India. People from Japan, Korea and China call people of India as Indu. Businessmen from India have been trading with these nations and other nations in south Asia and gulf for thousands of years. Businessmen of India are respected there due to their trustworthiness.

Things used to happen slowly back then. A deal used to take years in compliance by slow moving boats. Often father would visit a prospective buyer and years later, the son would fulfil the commitment. In the laws of India, a legatee/son is liable to pay the debts of father. Indu has a reputation to keep. Honour means predictability. Unpredictability is a dishonour. There is no reason to reach out to such person on phone.

As predicted, India has not said a word on Board of Conflict created by President Trump. PM Modi did not call him and will not call him except for utmost necessity.

This position of Modi is obvious to any person from India.

References:

1. Lutnick interview: https://www.reuters.com/world/india/india-us-trade-deal-stalled-after-modi-did-not-call-trump-lutnick-says-2026-01-09
2. Ted Cruz: https://www.axios.com/2026/01/25/cruz-trump-vance-secret-tapes
3. Unpredictability: https://www.historynewsnetwork.org/article/trump-brags-about-being-unpredictable-history-show
4. Foreign Policy: https://www.giga-hamburg.de/en/press/how-unpredictable-is-trumps-foreign-policy-set-to-be
5. Good or bad: https://insight.kellogg.northwestern.edu/article/is-an-unpredictable-leader-good-for-national-security
6. Operation Sindoor: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219026&reg=3&lang=1
7. India-EU trade deal: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219113&reg=3&lang=1