India-US Trade Talks Hit Negotiating Plateau as Scope for Further Concessions Narrows

India-US trade negotiations have entered a difficult phase with Finance Minister Nirmala Sitharaman stating that both sides appear to have reached a “plateau” beyond which further concessions could become very difficult. She however clarified that negotiations remain ongoing and that any remaining room for compromise could still be explored.

The comments highlight the growing complexity surrounding the proposed bilateral trade agreement which has been under negotiation since February 2025. The United States is seeking to reduce its trade deficit with India while New Delhi is negotiating to secure greater market access without compromising sensitive domestic sectors. Sitharaman described the negotiations as hard and rigorously conducted, signalling that the remaining differences involve issues where both sides have limited flexibility.

Tariffs have emerged as a major factor in the broader trade environment. Sitharaman noted that tariffs are increasingly being used to address trade imbalances moving beyond their traditional role as instruments within negotiations. The issue has gained additional significance amid potential US tariff measures linked to countries continuing to purchase Russian oil.

The immediate governance challenge is to balance export competitiveness with policy safeguards for Indian producers. The US remains India’s largest export destination with Indian goods exports to the American market rising to $42.79 billion during April-August, compared with $40.39 billion a year earlier. Prolonged uncertainty therefore, has implications for exporters, investment decisions and supply-chain planning.

The plateau does not necessarily mean negotiations have ended. A focused interim arrangement covering areas where differences are already resolved could remain possible while both governments continue working through the unresolved issues.