India-US trade talks have hit a plateau, says Nirmala Sitharaman
What's the story
Finance Minister Nirmala Sitharaman has said that the ongoing trade negotiations between India and the US have hit a plateau. The discussions are aimed at expanding market access and addressing trade balance concerns. However, Sitharaman said that further concessions from either side may be difficult after rigorous negotiations. Despite the current stalemate, she believes there is still room for further negotiations if both sides are willing to explore it.
Trade tactics
Shift in US's approach to trade imbalance
Sitharaman also highlighted a shift in the US's approach to its trade imbalance with India.
She said that instead of traditional negotiations, tariffs are increasingly being 'weaponised' to push countries into reducing their trade deficits.
This is a departure from the earlier method where dialogue was used to address trade imbalances and negotiate greater market access and concessions from each other.
Concession demands
US seeking concessions to address trade balance
Sitharaman also noted that the US is seeking concessions to address what it sees as losses from previous years.
The trade balance currently favors India, with Washington looking to reduce its deficit.
These talks are part of an interim trade agreement framework announced in February 2026 and a broader bilateral trade pact launched by Prime Minister Narendra Modi and US President Donald Trump in February 2025.
Tariff concerns
Concerns over tariff use in trade negotiations
Sitharaman also expressed concern over the rising use of tariffs to address trade imbalances.
She said these had previously been tools of negotiation within a framework that still exists.
The minister questioned whether India could adopt a similar tariff-based approach toward China, given its exponentially growing trade deficit with the country since 2014.
She stressed that India expects to resolve differences through negotiation and reciprocal concessions.
EU deal
India-EU trade agreement as model for future negotiations
Sitharaman also highlighted the India-EU trade agreement as a model of India's approach to negotiating deals while protecting sensitive sectors.
She said that sensitivities involving dairy, agriculture, and soya had been protected in this deal.
The free trade agreement negotiations were concluded on January 27, 2026, with proposals submitted to the EU Council seeking authorization for its signature and conclusion on September 11.