Why have India-US trade talks stalled again and what's next?
INDA•India-US efforts to finalise a bilateral trade agreement have stalled, with officials citing little room for manoeuvre and no imminent deal. India’s goods exports to the United States rose to $42.79 billion in April-August from $40.39 billion a year earlier.
1. Talks face obstacles
India and the United States agreed on a trade framework in February that reduced the punitive tariff on most Indian goods from 50% to 18%. After the Supreme Court invalidated the use of emergency powers for sweeping global tariffs, a 10% baseline rate took effect, but the two countries have not finalised a deal. Finance Minister Nirmala Sitharaman said talks had reached a “plateau,” while U.S. Trade Representative Jamieson Greer said a deal was not “imminent.”
2. Tariffs and trade stakes
A new U.S. law could pave the way for tariffs of up to 100% on Indian goods because of New Delhi’s purchases of Russian oil. A U.S. Section 301 investigation into alleged excess industrial capacity is also unfinished, leaving uncertainty over final tariffs. India’s goods exports to the United States reached $42.79 billion in April-August, up from $40.39 billion a year earlier, and India had a nearly $34 billion trade surplus with the United States in fiscal 2025/26.
3. Next steps
India is seeking to protect sensitive sectors, including agriculture, and wants greater certainty over U.S. tariffs before making concessions. The Trump administration wants India to cut Russian oil purchases, while India says fuel sourcing is driven by its energy needs. Secretary of State Marco Rubio is expected to visit India later this month, and Narendra Modi and Donald Trump are expected to speak again soon; Modi is expected to visit the United States in December for a G20 leaders’ meeting.
