India-US Trade Talks Stall as Both Sides Run Out of Room for Concessions.
Trade negotiations between India and the United States have reached a difficult stage, with Finance Minister Nirmala Sitharaman saying both countries have reached a “plateau” where further concessions could become increasingly difficult.
The talks remain open, but the comments signal that a bilateral trade agreement may take longer to conclude, adding to uncertainty for exporters, importers and businesses planning their India-US supply chains.
Speaking on Monday, Sitharaman said negotiations were still underway but that both sides had already gone through a rigorous process of give-and-take. She indicated that any further movement would depend on whether either side still had room to compromise.
The comments came days after US Trade Representative Jamieson Greer said that a trade agreement with India was not imminent, although negotiators had identified the principal areas of disagreement and were continuing to work through them.
Tariffs and trade imbalance remain central issues
The US has been seeking to address its trade deficit with India, while New Delhi has been pushing for improved market access for Indian exports. Sitharaman said the bilateral trade balance currently favours India, contrasting it with India’s much larger trade imbalance with China.
She also criticised the growing use of tariffs as a tool for addressing trade imbalances, arguing that such issues have traditionally been addressed through negotiations.
The negotiations, which began in February 2025, cover a wide range of market-access and tariff issues. The latest phase has become more complicated following new US measures related to countries purchasing Russian oil and gas. India remains a significant buyer of Russian crude, making energy trade an additional factor in its economic relationship with Washington.
Uncertainty builds for exporters
The prolonged negotiations are creating uncertainty for Indian businesses dependent on the US market. Exporters have reported changes in purchasing behaviour among US buyers, including smaller orders and greater diversification of sourcing, as companies seek to manage tariff-related risks.
For logistics and supply-chain operators, the uncertainty extends beyond tariff rates. Changes in sourcing patterns can affect shipment volumes, inventory decisions, freight contracts and the choice of manufacturing and distribution locations.
The US is one of India’s most important export markets, making the outcome of the negotiations particularly significant for sectors such as pharmaceuticals, engineering goods, textiles, chemicals and other manufactured products.
More tariff decisions could add pressure
Another unresolved issue is a US investigation under Section 301 of the Trade Act of 1974, which is examining concerns around industrial capacity and its potential impact on American businesses. Further tariff measures arising from the investigation could add another layer of uncertainty for Indian exporters.
For companies operating cross-border supply chains, the absence of a clear long-term tariff framework makes it harder to determine landed costs and plan sourcing strategies. Businesses may increasingly look at alternative markets and supplier bases until the policy environment becomes clearer.
The two countries have not abandoned the negotiations. However, Sitharaman’s remarks and the US trade representative’s recent comments suggest that the remaining differences are proving difficult to resolve.
For Indian exporters, the immediate priority is therefore likely to remain managing tariff and demand uncertainty while preparing for multiple trade-policy scenarios rather than assuming that a bilateral agreement will be concluded in the near term.
