India-US Trade Talks Hit a 'Plateau,' Finance Minister Sitharaman Says, as Russian Oil Tariffs Loom

India and the United States have been trying to finish a bilateral trade agreement since February 2025, when Prime Minister Narendra Modi and President Donald Trump agreed to launch negotiations in Washington. Twenty months later, there's still no deal.

Indian Finance Minister Nirmala Sitharaman put it bluntly on Monday at the Munich Leaders Meeting in New Delhi. "We'd like to believe that both the sides have reached a plateau beyond which giving or taking might be very, very difficult," she said, according to CNBC-TV18 and India Today. She added negotiations are technically still ongoing, and there's room to move "if there are rooms to operate from."

Her comments followed US Trade Representative Jamieson Greer's own admission last week that a deal was in the "short strokes" but not imminent, per CNBC-TV18. Greer said that after meeting India's Commerce Minister Piyush Goyal at the G20 Trade Ministers' Meeting in Milwaukee. Goyal has been in Washington since September 29 for another round of talks that India Today reported is scheduled to run through today, October 5; as of the most recent reporting, the two sides had not reached an agreement.

Why Now, Specifically

The timing isn't random. According to Reuters, as carried by KELO-TV, the room for compromise narrowed after Trump signed a congressional bill into law on September 18 giving him authority to impose tariffs up to 100% on countries buying significant amounts of Russian oil. That includes India and China.

India is the world's third-biggest oil importer and one of Moscow's largest customers since the West sanctioned Russia over its 2022 invasion of Ukraine. Reuters framed it as a genuine bind for Modi: cutting Russian oil imports could spike domestic fuel prices and strain government finances, while continuing them risks the tariffs that could cripple India's exports to its biggest market.

Sitharaman pushed back on the broader strategy of using tariffs this way. "I can take the same position, can I not, with China? It is so lopsided," she said, per KELO-TV, arguing India has its own massive trade deficit with Beijing but chooses negotiation over unilateral tariffs. She called the growing use of tariffs to fix trade imbalances a form of "weaponising" trade policy.

She also made clear the numbers favor India right now. "The trade balance is very much in our favour," Sitharaman said, noting Indian goods exports to the US rose to $42.79 billion between April and August, up from $40.39 billion a year earlier, according to Reuters' citation of Indian government data. Washington, she said, naturally wants to close that gap.

The Backdrop: A Relationship Under Strain

India's Foreign Minister S. Jaishankar told an Asia Society event last week that America's "self-centered" trade policies have made life "difficult" for countries like India, Women's Wear Daily reported, a comment first carried by Al Jazeera. Jaishankar also pointed to lingering friction over terrorism concerns stemming from the May 2025 India-Pakistan conflict, where Trump has repeatedly claimed credit for brokering the ceasefire, a claim India's government has disputed.

Still, the relationship hasn't collapsed. Modi and Trump spoke by phone last week for the first time since the Russia-sanctions law passed, calling it a "productive" conversation, Modi wrote on X, per Women's Wear Daily. They agreed to keep engaging on trade, defense, energy and critical technologies.

Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian trade official, told Reuters that "India should stop giving away concessions while the US trade deal remains unfinished." Negotiating against a moving target, where Washington can add new tariff threats mid-talks over an unrelated issue like Russian oil, puts New Delhi in a weak bargaining position.

The American concern over the trade deficit is real and documented by India's own export data. Whether tariff threats over Russian oil purchases are the right tool to fix that imbalance is a separate question from whether the imbalance itself is a legitimate grievance.

What Happens Next

Both sides set a target in February 2025 of more than doubling bilateral trade to $500 billion by 2030. An interim framework was announced in February 2026, but the broader Bilateral Trade Agreement remains unfinished.

Greer has said Trump and Modi could speak again soon to assess progress, per CNBC-TV18. No new negotiating date has been publicly announced. Whether India cuts Russian oil purchases to avoid the threatened 100% tariff, or whether Washington backs off the threat to save the broader deal, remains unresolved.