India and the United States have reached a difficult stage in negotiations for a bilateral trade agreement, with Finance Minister Nirmala Sitharaman saying there is now limited scope for either side to make additional concessions.

Speaking at the Munich Security Conference, Sitharaman said the negotiations had reached a “plateau” after extensive discussions between the two countries. She described the agreement being negotiated as the outcome of a tough and detailed process.

According to Sitharaman, moving beyond the current position would be challenging for both New Delhi and Washington.

She also indicated that the US is looking at ways outside the trade negotiations to address its trade deficit with India.

The comments come days after US Trade Representative Jamieson Greer said that a trade agreement with India was not imminent, although officials from both countries were continuing discussions and working through unresolved issues.

How did the trade negotiations reach this point?

India and the US began work on a broader Bilateral Trade Agreement in February 2025, after Prime Minister Narendra Modi and US President Donald Trump agreed to launch negotiations during Modi’s visit to Washington.

The two countries set an ambitious target of more than doubling bilateral trade to $500 billion by 2030. An interim agreement was subsequently pursued as an initial step towards the larger pact.

In February 2026, New Delhi and Washington announced a framework for an interim trade agreement, but both sides continued negotiations on the remaining issues.

The discussions have since focused on areas including tariffs, market access and the imbalance in bilateral trade.

US trade deficit remains a key issue

The trade imbalance remains one of the central issues in the negotiations.

The United States has been seeking greater access to the Indian market and measures that would narrow its trade deficit with India. Sitharaman said Washington was also considering measures beyond the formal trade negotiations to address the imbalance.

The talks have become more complicated amid disagreements over tariffs and other unresolved issues.

Greer said on October 1 that negotiators had identified a range of sticking points and were continuing to work through them, but he cautioned that an agreement was not expected immediately.

Piyush Goyal held fresh talks in US

The latest negotiations coincided with Commerce and Industry Minister Piyush Goyal’s visit to the United States from September 29 to October 5.

Goyal met Greer on the sidelines of the G20 Trade Ministers’ meeting in Milwaukee as the two sides continued efforts to resolve outstanding issues surrounding the proposed interim agreement. Greer described the discussion as constructive while maintaining that a final deal was not imminent.

The two countries are also facing fresh uncertainty over potential US tariff measures linked to countries that purchase Russian energy. India, a major buyer of Russian crude, could be affected by any such measures, adding another layer of complexity to the negotiations.

What happens next?

Sitharaman’s assessment suggests that the negotiations have reached a point where further movement could require difficult decisions from both sides.

While the Finance Minister described the talks as having reached a plateau, the negotiations have not formally ended. Officials continue to discuss unresolved issues, and both governments remain engaged on the proposed interim agreement.

For now, however, neither side appears ready to make significant additional concessions, leaving the timing and final shape of the India-US trade agreement uncertain.