A long-discussed U.S.–India trade agreement failed to materialise not solely because of unresolved economic issues, but due to timing, political caution in New Delhi, and what Washington insiders describe as a deliberately hard-edged negotiating style under former U.S. President Donald Trump.
That account has now been publicly detailed by Howard Lutnick, who offered an unusually candid explanation of why negotiations stalled suggesting that India missed a narrow window of opportunity by not acting decisively at a critical moment.
Speaking on the All-In Podcast, Lutnick said the Trump administration operated on a fast-moving, competitive trade strategy that rewarded countries willing to close deals quickly and penalised hesitation, regardless of strategic importance.
The “Staircase” Approach to Trade Deals
At the centre of Lutnick’s account is what he described as Trump’s “staircase” model of trade negotiations. Under this framework, the first country to finalise an agreement secures the most favourable terms. Each subsequent deal is concluded on progressively less generous conditions, as the baseline effectively moves higher.
“The first stair gets the best,” Lutnick said, explaining that once an early agreement is signed, later partners cannot demand similar terms. “Everyone says they want the first deal. But that only exists once.”
According to Lutnick, this approach was not theoretical but actively enforced. Countries were given strict timelines to conclude negotiations, with clear signals that delays would result in lost advantages.
How the UK Moved First
Lutnick cited the United Kingdom as an example of how the strategy worked. British negotiators, he said, were given a short deadline described informally as “two Fridays” to finalise their agreement.
As the deadline approached, UK Prime Minister Keir Starmer personally contacted Trump, accelerating the final stages of the deal. The agreement was soon announced publicly, setting the benchmark for all subsequent trade talks.
That early closure, Lutnick argued, allowed the UK to secure terms that were no longer available once the staircase moved upward.
India’s Window—and Its Closure
India, by contrast, was given what Lutnick described as “three Fridays” to conclude negotiations. During that period, Trump publicly hinted that India could be next in line for a deal, a move intended to prompt urgency.
However, New Delhi did not move quickly enough.
According to Lutnick, internal political considerations and discomfort with the optics of Prime Minister Narendra Modi personally calling Trump slowed the process. “I kept saying, ‘You’ve got to have Modi call the President,’” Lutnick said. “They were uncomfortable doing so. The call never came.”
As the deadline passed, Washington shifted focus. In the weeks that followed, the U.S. announced trade agreements with several Asian economies, including Indonesia, the Philippines, and Vietnam.
Those deals, Lutnick said, were concluded on tougher terms with higher tariffs and stricter market-access conditions because the most favourable slot had already been taken.
Terms No Longer on the Table
When Indian officials later sought to revive negotiations, Lutnick said they were effectively asking for conditions that no longer existed something between the UK deal and later Asian agreements.
“They wanted something in the 15 to 20 per cent tariff range,” he said. “But that deal was gone. That was then not now.”
In Lutnick’s telling, India’s position worsened with every delay, as the global trade landscape shifted around it. Attempts to renegotiate after the fact only reinforced the new, less favourable baseline.
Not a Breakdown, but a Misalignment
Despite the sharp assessment, Lutnick stressed that the collapse of talks was not driven by hostility toward India. Instead, he attributed it to misaligned political rhythms and the realities of democratic decision-making in New Delhi, where trade agreements often require broader consensus and careful domestic messaging.
Trade negotiations, he acknowledged, are rarely simple. But under Trump’s approach, patience was limited. “There are many countries,” Lutnick said. “Each has its own internal politics. But the train doesn’t wait.”
What the Episode Reveals About U.S. Trade Strategy
The episode highlights a broader shift in U.S. trade policy during the Trump era one that prioritised speed, leverage, and visible wins over prolonged negotiations. Lutnick portrayed himself as the “table-setter,” structuring deals rapidly before Trump made the final call as the “closer.”
While Lutnick said he remains confident that the U.S. and India will eventually reach an agreement, he made clear that any future deal would likely come on less advantageous terms than those once available.
Trump, for his part, has continued to speak positively about Modi in public, calling him a “friend” and a “strong leader.” Yet the failed agreement has become a cautionary example for policymakers in New Delhi illustrating the potential cost of hesitation in a White House that viewed trade negotiations as a competitive race rather than a slow diplomatic process.
