05 October,2026 02:30 PM IST | New Delhi | mid-day online correspondent
Union Finance Minister Nirmala Sitharaman. File Picture.
Finance Minister Nirmala Sitharaman on Monday said the trade negotiations on the India-US trade agreement have been "hard and very rigorously" conducted but felt it might have reached a stage where providing further concessions would be difficult for both the sides, reported news agency PTI.
On the India-US trade agreement, she said, "The agreement's negotiations are still ongoing, although we like to believe that both sides have reached a plateau beyond which giving or taking might be very, very difficult. But maybe, if there is room to operate from, both sides would do it."
Sitharaman said a key feature of India-US trade relations is the trade imbalance in India's favour, with US seeking to reduce its deficit.
"Naturally, the deficit is there on their side, or the balance is unfavourable for the US, so they would want to reduce that imbalance," she said. She said from its perspective, US would seek to make up for what it believes it has lost over the years.
Citing India's trade relationship with China as an example, she said trade imbalances have traditionally been addressed through negotiations, with countries seeking greater market access for their goods and services.
However, she said tariffs are increasingly being used as a tool to address trade imbalances.
"Now the imbalance is being sought to be addressed through other means, where, as you rightly said, tariff has become weaponised. Tariff was an instrument of negotiation, and tariff had a certain framework within which you would apply it. Today, the framework is there, but tariffs are going," she said.
She questioned whether India could adopt a similar approach in dealing with China, given the significant trade imbalance between the two countries, skewed in China's favour.
"The trade imbalance with China for India, for instance, since 2014, has been growing exponentially. So when you're talking of trade and trade imbalance being the sole criteria to reduce the imbalance, to what extent beyond negotiation can you go?" she wondered.
Her comments come amid a backdrop where US imposed 100 per cent tariffs on the world's top five purchasers of Russian oil or natural gas, including India and China. In July, it had imposed a 10 per cent tariff on goods imported from India on issue forced labour.
India and the US in February announced the finalisation of the framework for the first phase of the bilateral trade agreement, however, changes in the tariff landscape in the US have led to further negotiations on the pact.
India's exports to the US increased by 21.83 per cent to USD 8.4 billion in August, while imports rose 65.78 per cent to USD 5.97 billion.
During April-August 2026-27, India's merchandise exports to the US gained 6.17 per cent to USD 42.8 billion, while imports jumped 29.6 per cent to USD 28 billion.
The US was the largest trading partner of India in 2025-26 at USD 132.2 billion (exports USD 86.51 billion and imports USD 45.62 billion).
She described the India-European Union trade agreement as an example of India's approach to negotiating trade pacts, according to IANS.
"The mother of all deals" was an apt description for the agreement, FM Sitharaman said, referring to a phrase used by European Commission President Ursula von der Leyen.
While noting the EU agreement would cover economies representing about two billion people and around a quarter of global GDP, she said India had opened up 92.5 per cent of its tariff lines and about 97 per cent of trade value under the agreement, while the EU had opened up about 99 per cent of trade value and around 97 per cent of tariff lines.
The minister said the selection of market access commitments was based on the complementarity of the two economies and the need to ensure that India's competitiveness was not adversely affected.
(With inputs from PTI and IANS)
