India‑US trade talks hit a plateau, says Finance Minister Nirmala Sitharaman

India‑US trade talks at a plateau Finance Minister **Nirmala Sitharaman** addressed the Munich Leaders Meeting in New Delhi on 5 October, saying the India‑US trade negotiations remain active but appear to have reached a point where additional concessions could be “very, very difficult”. She described the talks as “hard and very vigorously negotiated” and urged both sides to explore any remaining room for compromise.

Trade balance and US concerns Sitharaman highlighted that the trade balance currently favours India. Between April and July of the current fiscal year, **India’s exports to the United States rose to $34.5 billion**, while imports were $22.2 billion, leaving a **$12.3 billion surplus** for New Delhi. She said Washington is keen to reduce this deficit and is seeking concessions to address what it perceives as accumulated losses.

Framework for an interim agreement The negotiations build on a **framework for an interim trade agreement announced in February 2026**. A joint statement from India’s commerce ministry on 7 February outlined plans to finalise that interim pact while continuing work on a broader bilateral trade treaty. The framework includes: - Tariff reductions and removal of non‑tariff barriers; - Preferential market access and supply‑chain cooperation; - Future discussions on digital trade and additional market‑access commitments.

Tariffs as a “weapon” Sitharaman warned that tariffs are increasingly being used as a tool of pressure rather than a negotiated concession. “Tariff has become weaponised,” she said, noting that this trend persists even though the interim framework is still in place.

Wider trade landscape: China and the EU The minister also referenced India’s growing trade deficit with **China**, which she said has expanded “exponentially” since 2014, and questioned whether a similar tariff‑based approach could be applied.

Turning to Europe, Sitharaman described the **India‑EU free‑trade agreement** as the “mother of all deals”, noting that the two economies together account for about a quarter of global GDP. Sensitive sectors such as dairy, agriculture and soya have been protected in the deal. The EU concluded FTA negotiations on **27 January 2026**, and the European Commission submitted ratification proposals to the EU Council on **11 September 2026**.

Balancing national interests and global supply chains Sitharaman emphasized that India aims to tailor agreements to safeguard national interests while preserving supply‑chain resilience and forging new partnerships where existing links have been disrupted. She also criticised what she sees as departures from World Trade Organization rules by various countries.

Looking ahead The next steps involve finalising the interim India‑US agreement, progressing the broader bilateral pact, and securing EU ratification of the FTA. All three tracks will shape India’s trade posture in a challenging global environment.