India and the United States appear to have reached a difficult stage in their long-running trade negotiations, with Finance Minister Nirmala Sitharaman saying there is now limited room for further concessions from either side.
Speaking in New Delhi on October 5, Sitharaman described the negotiations as hard-fought and said moving beyond the current position could be “very, very difficult”. However, she stressed that discussions between the two countries are still continuing.
Trade Deal Faces Fresh Challenges
India and the US have been negotiating a broader trade agreement since February 2025, with the goal of expanding market access and strengthening economic ties. The two sides have yet to reach a final agreement despite several rounds of negotiations.
US Trade Representative Jamieson Greer recently said that a deal was not imminent following his meeting with Commerce and Industry Minister Piyush Goyal.
Tariffs Add to the Pressure
Tariffs remain one of the biggest challenges in the negotiations. Washington is seeking to reduce its trade deficit with India, while New Delhi has been pushing for better and more balanced terms.
Sitharaman also criticised the growing use of tariffs as a tool to address trade imbalances, arguing that such issues should traditionally be handled through negotiations and greater market access.
Russian Oil Complicates the Equation
The trade negotiations have also become more complicated because of India’s continued purchases of Russian oil. New US legislation gives President Donald Trump authority to impose tariffs of up to 100% on countries buying significant quantities of Russian oil, potentially putting additional pressure on India’s exports to the US.
For India, reducing Russian oil purchases could affect fuel costs and government finances, while continuing them could expose Indian exports to greater tariff pressure.
What Happens Next?
Despite the current deadlock, neither side has walked away from negotiations. India is seeking a deal that provides competitive access for its exporters, while the US wants greater market access and a reduction in its trade deficit.
The latest comments from Sitharaman suggest that the next phase of negotiations may depend on whether both countries can find enough flexibility to bridge their remaining differences.