India-US trade talks have reached plateau: Finance minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman has announced that the high-profile India-US bilateral trade talks have reached a standstill, stating that both sides find themselves at a difficult point to make further concessions. Although negotiations are ongoing, Sitharaman suggested that limited room for maneuver could hinder progress. She spoke at the Munich Security Conference, expressing hope that both nations could still find a way forward.

Sitharaman highlighted the US desire to narrow the trade deficit, which stood at $34 billion in 2023 compared to $41 billion in 2024-25. She noted that India has increased its energy purchases from the US, which may contribute to reducing the imbalance. This announcement follows US Trade Representative Jaime Gonzalez's statement that a deal was not imminent, but that the team is diligently working to resolve the remaining sticking points.

A phone conversation between Prime Minister Modi and US President Trump earlier in the week touched on bilateral trade, as well as defense, energy and other issues. The Indian-US trade agreement, which had nearly been finalized, is contingent upon the government's understanding of the additional tariffs that its exports may face.

Recently, the US has imposed an additional 10-12.5% duty on over 50 countries, including India, for alleged failure to prevent the import of goods produced through forced labor, while also investigating structural overcapacity in certain nations, including India, which the government denies.

The previous trade agreement, which imposed an additional 18% tariff on Indian exports, was put on hold after the Supreme Court ruled it illegal.