Business EconomyPosted at: Oct 5 2026 5:32PM


India-US trade talks at ‘plateau’, further concessions may be difficult: Sitharaman

New Delhi, Oct 5 (UNI) India-US trade negotiations are continuing, but the two sides may have reached a point where securing further concessions could become increasingly difficult, union Finance Minister Nirmala Sitharaman said on Monday.
Speaking at the Munich Leaders Meeting in New Delhi, Sitharaman said the negotiations have been intensive and remain unresolved, while indicating that both countries are assessing whether there is still room to bridge the remaining differences.
“The negotiations are still ongoing although we would like to believe both sides have reached a plateau beyond which giving or taking might be very, very difficult,” she said.
The minister said the two sides could nevertheless examine whether there was any additional space for movement before finalising the agreement.
Sitharaman highlighted the trade imbalance between the two countries as one of the key issues in the negotiations. The US has been seeking to narrow its trade deficit with India, while New Delhi has been looking to secure greater market access and protect areas considered sensitive.
India recorded a trade surplus of $12.3 billion with the US during April-July of the current financial year. Exports to the US stood at $34.5 billion during the period, compared with imports of $22.2 billion.
The minister said Washington's push for concessions was partly aimed at addressing what it considers losses accumulated over several years.
The ongoing talks follow an interim trade framework announced in February 2026. Under the framework, India and the US agreed to work towards reducing tariffs, addressing non-tariff barriers and expanding preferential market access, while also strengthening supply-chain cooperation.
Negotiations were subsequently expected to cover areas including digital trade and additional market-access commitments. The broader bilateral trade discussions were launched by Prime Minister Narendra Modi and US President Donald Trump in February 2025.
Sitharaman also raised concerns over the increasing reliance on tariffs as a tool to correct trade imbalances.
She said tariffs had traditionally formed part of negotiations in which countries sought to address differences by offering reciprocal market access. However, their growing use as a pressure mechanism represented a significant change, she argued.
“Tariff has become weaponised,” Sitharaman said, questioning why tariffs were continuing to rise despite the existence of an established framework for resolving trade disputes.
She drew a comparison with India's trade relationship with China, where the country's trade deficit has expanded sharply since 2014. The minister questioned whether India could adopt the same tariff-centric approach towards China, given that both sides are expected to resolve trade differences through negotiations and reciprocal concessions.
According to Sitharaman, the traditional purpose of trade negotiations was to identify areas of imbalance and create opportunities for countries to open their markets to each other's products. The manner in which trade imbalances are being addressed has now changed, she said.
Sitharaman also cited India's trade negotiations with the European union as an example of how New Delhi is attempting to balance market access with domestic interests.
Describing the India-EU agreement as the “mother of all deals”, she pointed to the combined economic weight of the two sides, which account for around a quarter of global GDP.
She said India had ensured that sensitive sectors, including dairy, agriculture and soya, received protection during the negotiations.
India and the EU concluded negotiations on their free trade agreement on January 27, 2026. The European Commission subsequently submitted proposals to the EU Council in September seeking authorisation for the signing and conclusion of the agreement.
Sitharaman said India's trade strategy is also being shaped by the need to strengthen supply chains and develop new economic partnerships, particularly at a time when existing trade and investment linkages are being disrupted by geopolitical developments.
She said India was calibrating its trade agreements to protect national interests while continuing to expand international market access.
The finance minister also criticised the erosion of established multilateral trade rules, including provisions under the World Trade Organization framework, alleging that countries have breached those rules in different ways.
Against this backdrop, India is seeking to negotiate trade agreements that provide greater access for its exporters while preserving policy space for sectors considered strategically or economically sensitive.
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