Winning Bizness Desk

Mumbai.Finance Minister Nirmala Sitharaman has said India-US trade negotiations have reached a difficult point, with neither side willing to offer further concessions. However, she made it clear that the talks have not collapsed and both countries will continue looking for possible openings.

Speaking at the Munich Leaders Meeting in New Delhi on Monday, Sitharaman said the negotiations had reached a stage where it was becoming difficult for both India and the United States to move further on their respective positions. She said if a new avenue or room for compromise emerges, both sides would remain open to discussing it.

What the deadlock means for both countries

The immediate issue is the extent to which either country can change its position without affecting the interests of its farmers, businesses and traders.

• Neither India nor the US is currently ready to make further major concessions.
• The talks slowing down does not mean the proposed trade deal has been abandoned.
• Until an agreement is reached, existing tariff arrangements will continue.
• The negotiations have therefore entered a phase where both sides are weighing their domestic economic interests against the wider benefits of a trade agreement.

US seeks to narrow its trade deficit

The United States is seeking to reduce its trade deficit with India, Sitharaman said. India currently has an advantage in bilateral trade, with the US looking to address the imbalance. Washington has been pushing for measures that can increase access to the Indian market and reduce the gap between imports and exports. India, however, has been seeking to protect the interests of its farmers, businesses and other domestic sectors while negotiating market access.

Sitharaman questions tariff hikes as solution

Sitharaman also questioned the approach of repeatedly raising tariffs to reduce trade deficits. She said such issues are generally addressed through negotiations rather than by relying only on higher duties. Referring to China, she said India has a significant trade deficit with the country but that the problem cannot be resolved simply by imposing very high tariffs.

Instead, she stressed the importance of negotiations, trade-offs and mutually agreed arrangements between countries.

WTO rules under pressure as national interests dominate

The Finance Minister said the global trading environment has become increasingly difficult, with the rules of the World Trade Organisation not being followed properly. She said almost every country was violating or bypassing these rules in some form. In such circumstances, India’s priority in negotiating trade agreements is to protect its national interests while securing arrangements that provide long-term benefits to Indian businesses and the wider economy.

US says trade deal remains in final stage

US Trade Representative Jamieson Greer had recently said the India-US trade agreement was in its final stage, although it would take time before it could be implemented.

According to him, the key unresolved issues had already been identified and discussions were continuing to address them. The next phase could also involve direct communication between the leadership of the two countries, with the US President and Prime Minister Narendra Modi expected to speak by phone about the negotiations.

Talks have faced repeated delays over 20 months

The negotiations have been delayed on several occasions since 2025.

• August 2025: A meeting planned in New Delhi was cancelled after US tariffs on Indian goods rose to around 50%.
• February 2026: A proposed visit by an Indian delegation to the US was postponed amid changes in rules and policies.
• Recent developments: The US Trade Representative ruled out an immediate agreement, while Sitharaman said there was now limited room for further movement.

Experts have also cautioned against relying only on tariff exemptions for a long-term agreement.

Under US rules, such exemptions can be changed or withdrawn through different mechanisms. A durable trade deal, therefore, would require clear guidelines, sustained negotiations and greater policy certainty from Washington. For now, both countries remain engaged, but the negotiations have reached a point where finding additional concessions is proving increasingly difficult.