Stalemate In India-US Trade Talks? Sitharaman Flags 'Give-and-Take Very Difficult'

India-US trade deal negotiations have reached a “plateau”, Finance Minister Nirmala Sitharaman said on Monday, warning that further concessions from either side could be “very, very difficult” even as talks continue.

Her remarks came days after US Trade Representative Jamieson Greer said a trade agreement was not “imminent”, with India and the US having identified a “universe of items” that remain sticking points.

“The agreement negotiations are still ongoing, although we'd like to believe that both the sides have reached a plateau beyond which giving or taking might be very, very difficult,” Sitharaman said at the Munich Security Conference. She added that if there was room for both sides to operate, they could still make progress.

The two countries have been negotiating the trade agreement since February 2025, with the talks focused on market access and other trade issues. Greer said last week that negotiations were in their final phase but that an immediate signing should not be expected.

Russia Sanctions Add To Trade Tensions

The negotiations are taking place amid fresh uncertainty over US tariff policy, particularly Washington's measures targeting countries that continue to buy Russian energy.

India remains a major buyer of Russian oil, creating an additional point of tension as the US seeks to use tariffs and other trade measures to address its bilateral trade deficit.

Sitharaman said the trade balance between India and the US is currently in India's favour, while India faces a much larger imbalance in its trade with China. She questioned the growing use of tariffs as a means of addressing trade imbalances.

“Negotiation used to be the only platform through which countries could highlight the discrepancies,” Sitharaman said, adding that tariffs had increasingly become “weaponised”.

The Finance Ministry's latest Monthly Economic Review has also said that India's trade relations with the US remain unsettled following the passage and presidential approval of the new Russia-related sanctions legislation.

Commerce and Industry Minister Piyush Goyal has been engaged in negotiations with US officials, including Greer, on the sidelines of the G20 Trade Ministers' meeting in Milwaukee. Greer described his recent meeting with Goyal as constructive.

Section 301 Probe Adds To Export Uncertainty

Another unresolved issue is a US investigation under Section 301 of the Trade Act of 1974 into alleged excess industrial capacity and its potential impact on American industries.

The investigation is part of a broader US effort examining industrial overcapacity and trade practices. The outcome could have implications for Indian exporters if additional tariffs or other trade measures are imposed.

The uncertainty is already affecting business planning, with Indian exporters reporting changes in the way US buyers place orders. Instead of committing to large bulk orders, some buyers are reportedly diversifying their sourcing, raising concerns about the impact on Indian exports if the trade deal remains unresolved.

For now, both governments continue to negotiate. But Sitharaman's comments, following Greer's warning that a deal is not imminent, indicate that the remaining differences could take longer to resolve than previously expected.