Negotiations between India & US Stagnate as Few Concessions Left to Be Made: Nirmala Sitharaman

Though India and the US continue their trade talks, it is getting more and more challenging for the parties to find concessions to be made to reach the agreement. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

According to Indian Finance Minister Nirmala Sitharaman, the two countries' negotiations entered a "plateau" phase due to a lack of any major concessions that the sides could give to each other. 

The talks, which began back in February 2025, are meant to consolidate economic cooperation and reconcile the existing differences concerning the access to each other's markets. However, despite months-long negotiations, no agreement was reached yet. 

As Sitharaman claimed, the proposed pact had been negotiated hard and vigorously enough; however, she made it quite clear that the talks did not cease. 

Russian Oil Complicates the Negotiations 

That room has become narrower after US President Donald Trump signed legislation allowing tariffs of as much as 100% on countries making significant purchases of Russian oil. 

India, the world’s third-largest oil importer, is also one of the biggest buyers of Russian crude. 

That leaves New Delhi facing a difficult trade-off. Reducing Russian oil purchases could push up fuel costs or put additional pressure on government finances. Continuing those purchases, however, could expose Indian exports to steep US tariffs. 

The possibility of such tariffs has added another complication to trade negotiations that were already struggling to bridge differences between the two sides. 

Last week, US Trade Representative Jamieson Greer said an agreement was not imminent after meeting Commerce and Industry Minister Piyush Goyal in the United States. 

Trade Imbalance Remains a Sticking Point 

The trade balance between the two countries is another important part of the negotiations. 

Sitharaman said the balance currently favours India, leaving Washington with the deficit it wants to reduce. 

The US is India’s largest export destination. Indian goods exports to the country rose to $42.79 billion between April and August, compared with $40.39 billion during the same period a year earlier. 

Reuters had previously reported that the two countries failed to reach a consensus as India pushed for better terms while Washington sought additional concessions. 

Sitharaman Questions Use of Tariffs as Pressure Tool 

Beyond the immediate negotiations, Sitharaman also questioned the growing use of tariffs to deal with trade imbalances. 

She argued that tariffs have traditionally been part of trade negotiations, but their role is increasingly moving beyond that and becoming more of a pressure tool. 

To illustrate the point, she referred to India’s own large trade deficit with China. 

Despite that imbalance being heavily tilted against India, Sitharaman said New Delhi is still expected to address the issue through negotiation and give-and-take rather than simply responding with punitive tariffs. 

For India and the US, negotiations remain open. But Sitharaman’s remarks make clear how difficult the final stretch has become. 

Both countries still want an agreement, but after more than a year and a half of talks, the easier compromises appear to have already been made. What remains are the issues on which neither side has much room left to move.