In a candid interview on the All-In Podcast—hosted by Sri Lankan-born Canadian-American billionaire venture capitalist and entrepreneur Chamath Palihapitiya—released on 9 January 2026, United States Commerce Secretary Howard Lutnick offered an unusually detailed account of why India failed to secure an early-mover trade agreement with the Trump administration during 2025. It is a version that, if accepted at face value, casts the episode as a missed opening that pushed New Delhi down the queue and left it facing materially harsher terms (4-min video clip).
Yet India on Friday has rejected the core characterisation as “not accurate”, underlining that negotiations have been close on several occasions and that high-level engagement between Prime Minister Narendra Modi and President Donald Trump continued through 2025. What emerges, therefore, is not merely an anecdote about a phone call, but a revealing glimpse into how the Trump administration frames trade—as a race with deadlines and hierarchy—and how India’s own political economy forces caution on issues that cut close to food security, livelihoods, and strategic autonomy.
The Staircase and the Shot Clock
Lutnick described President Trump’s approach to trade negotiations as a “staircase”: the first country to close a deal gets the best terms, and each subsequent agreement begins from a higher step. In that telling, speed is not just desirable; it is determinative.
The United Kingdom, he argued, moved with urgency. Its “Economic Prosperity Deal”—a limited framework rather than a comprehensive free-trade agreement—was announced on 8 May 2025 and became the reference point for the “first stair”, which Chamath described as the floor. The broad architecture, as publicly outlined, retained a baseline tariff while offering sector-specific reductions and market-access commitments. Britain, for instance, committed to changes in its in-quota tariff treatment for US beef and to a sizeable Boeing aircraft purchase linked to a UK airline.
India, Lutnick said, was positioned to be next. He claimed New Delhi was given “three Fridays”—a tight, deadline-driven negotiating window beginning in late June 2025—essentially a shot clock in diplomatic form. The premise was blunt: miss the window and the market will move on, with the next deals resetting the floor.
“We told India, you have three Fridays. You put them on a shot clock,” Lutnick recalled.
The Call That Never Came
According to Lutnick, his department’s team had done the spadework—negotiated “the contracts” and set the deal up—but the final step required direct leader-to-leader closure. “Let’s be clear, it’s his deal. He’s the closer, he does the deal,” Lutnick said, referring to Trump. In his account, India’s negotiators were reluctant to have Modi make the final call, and the moment passed.
This is where diplomacy, optics, and domestic politics begin to matter as much as tariff lines. India’s political leadership is acutely sensitive to the optics of being seen to “yield” under public pressure—especially on trade, which is routinely weaponised in domestic debate. A trade negotiation with Washington is not merely a technocratic exercise; it is a contested political arena in which concessions on agriculture or dairy can be framed as betrayal of farmers, and any seeming pliability can be read as weakness.
The same period also saw evident friction in the relationship. In mid-June 2025, Modi publicly described having declined an invitation from Trump to stop in Washington after the G7 Summit in Canada, citing prior commitments and his planned visit to Odisha. Separately, reports indicated that Modi used a call with Trump around 18 June to push back on Trump’s public claim that he had brokered an India–Pakistan ceasefire following a brief military flare-up in May—an assertion India disputed. Taken together, these episodes suggest a context in which personal chemistry and public narrative had become unusually salient.
If Lutnick’s version is correct, India’s hesitation—whether rooted in optics, fear of an unpredictable last-minute demand, or a strategic decision to avoid being cornered—came at a clear cost in this administration’s sequencing model.
The Deals That Moved On Without India
Once the window closed, Lutnick said, the United States pivoted quickly to other partners. By late July 2025, Washington had announced a framework with Indonesia, followed by a headline-grabbing tariff announcement connected to the Philippines at about the same time. These were reported at tariff rates far higher than the UK’s baseline: around 19 per cent in each case. Vietnam followed later in October 2025, with a framework in which a 20 per cent baseline featured prominently, alongside the possibility of reductions for selected items.
In Lutnick’s telling, when India came back after the deadline seeking terms closer to what had been discussed earlier, it found the “staircase” had moved. The deal that might have been available as an early mover was no longer available as a late entrant. It is a framing that makes time itself a negotiating instrument—another lever, alongside tariffs and public messaging.
India’s Rebuttal: “Not Accurate”
India has rejected Lutnick’s characterisation in unusually direct terms. The Ministry of External Affairs on Friday stated that the account was “not accurate”, emphasising that discussions had been close to conclusion on “several occasions” and that India remained interested in a mutually beneficial agreement between “two complementary economies”.
Most notably, the MEA countered the insinuation that Modi had avoided engagement with Trump, stating that the two leaders had spoken by phone eight times during 2025 on different aspects of the partnership. That point matters because Lutnick’s narrative hinges on the idea that the absence of a particular call became the decisive missing link.
The Indian response, in effect, suggests either that the “call-to-close” requirement is being overstated, or that the negotiations were not as settled as the US side now portrays—or both. It also reflects a wider Indian concern with public narrative: once a story hardens in Washington into a convenient explanation, it can become a negotiating tool as much as a retrospective.
The Trade Context and the Tariff Escalation
India was among the early movers in opening trade discussions with the Trump administration, with talks reported to have begun as early as March 2025, following Modi’s White House meeting with Trump on 13 February 2025. Both sides spoke at the time of an ambitious goal: lifting bilateral trade to $500 billion by 2030 from roughly $191 billion.
But the political economy on both sides is unforgiving. The US has consistently pressed India on market access in agriculture and dairy, as well as on regulatory and non-tariff barriers. India, for its part, has treated agriculture and dairy as near-red-line sectors given the scale of domestic livelihoods, the politics of farm distress, and the enduring sensitivity after the 2020–21 farm-law agitation. In parallel, New Delhi has been unwilling to accept trade-linked constraints that could be construed as undermining strategic autonomy—particularly where energy sourcing from Russia is concerned.
That Russia linkage became central by mid-2025. Trump announced a 25 per cent tariff on Indian goods from 1 August 2025, accompanied by an additional penalty linked to India’s continued purchases of Russian oil. A subsequent White House executive action in early August imposed an additional 25 per cent duty tied to Russia-related concerns, taking the headline burden to an effective 50 per cent from 27 August 2025 for affected items—one of the steepest country-specific tariff regimes then in force.
Whether one treats that escalation as pressure tactics, punishment, or bargaining posture, it forms the hard backdrop against which any future deal will now be negotiated.
Where the Deal Stands Now—and What This Episode Really Reveals
As of January 2026, despite confident hints from the US side that “India will work it out,” the agreement remains unfinished. The central obstacles—agriculture and dairy access, and the wider Russia-related sanctions environment—have not disappeared. Nor has the deeper problem of trust: India is wary of last-minute “closing” demands; the US appears impatient with India’s incrementalism and domestic constraints.
In hindsight, everyone is wiser—and this latest revelation will inevitably become fresh political ammunition in India. The Opposition will argue, as it suits the moment, either that Modi was indecisive and allowed a rare opening to slip away, or that he was protecting the interests of favoured crony capitalists; yet had the deal been clinched in June, the same voices would almost certainly have accused him of bartering away Indian farmers’ interests under Trump’s arm-twisting.
Be that as it may, the episode reveals—far more starkly than official communiqués ever do—how trade deals are negotiated, especially under the Trump administration’s deadline-and-leverage model, and what opportunity India is said to have missed. And when a deal is eventually concluded, it will provide a clear benchmark against which the outcome can be judged: whether India, by waiting, secured a better overall settlement—quite apart from, and even if one were to disregard, the sheer burden imposed by the 50 per cent penal tariffs in the interregnum.