Explained: Why Did The India-US Trade Deal Hit A ‘Plateau’?

On Monday, Finance Minister Nirmala Sitharaman said the negotiations had reached a “plateau”, beyond which giving or taking more would be “very, very difficult” for both India and the US. She stressed that negotiations are still continuing and described the agreement as a “hard and very vigorously negotiated” one.

The India-US trade deal is not dead. But it is also nowhere near the easy finish that some recent statements from both sides had suggested.
Her comments came just days after US Trade Representative Jamieson Greer said the deal was “not imminent”, even though both sides were in the final phase of negotiations and had identified a “universe” of sticking points. Put together, the two statements tell us something important: the broad contours of a deal may be understood, but the remaining issues are precisely the ones on which neither side wants to give much more ground.

So what exactly is holding it up?

The February Framework Was Only The Beginning
India and the US had already announced a framework for an Interim Trade Agreement in February. Under that framework, India agreed to reduce or eliminate tariffs on US industrial goods and a wide range of American agricultural and food products. The US, meanwhile, agreed to an 18% reciprocal tariff rate on specified Indian-origin goods, with the framework also providing for tariff relief on several categories.

The framework was supposed to lead into a broader Bilateral Trade Agreement. It also covered areas beyond simple tariff cuts, including non-tariff barriers, supply chains and digital trade.
That is why the current impasse is significant. The disagreement is no longer about whether there should be a deal. It is about the price of getting the remaining pieces over the line.

For Washington, The Trade Deficit Matters

Sitharaman offered an important clue about the American position. She said the bilateral trade balance is currently in India’s favour and that Washington wants to reduce that imbalance.
In 2025, the US ran a $58.4-billion deficit in goods trade with India, importing $103.8 billion worth of Indian goods while exporting $45.4 billion to India. Including services, the US deficit was roughly $63 billion. That makes market access central to the negotiations.

The US wants greater access for American goods in India, while India wants better and more predictable access for its exporters in the US. The problem is that market access is not simply a matter of announcing a lower tariff and moving on.

Agriculture is particularly sensitive. The February framework itself listed a wide range of US agricultural and food products for tariff reductions or elimination. At the same time, India has repeatedly maintained that the interests of its farmers and sensitive agricultural sectors have to be protected.

This is where the negotiating room starts becoming narrower. A concession that looks small on a spreadsheet can have very different consequences for a protected domestic sector.

And The Argument Is No Longer Just About Tariffs

The negotiations have also expanded into regulatory and non-tariff issues. In August, it was reported that India and the US were discussing issues involving US medical devices, licensing for certain ICT products, food and agricultural products and digital trade. India was also considering possible concessions relating to digital trade and data governance.
That matters because these are not conventional tariff negotiations.

A tariff can be reduced through a specific number in an agreement. But changing regulatory requirements, digital rules or market-access conditions can have longer-term implications for how Indian companies and policymakers operate.
And that is one reason the final stage can be harder than the beginning.

Then Came Another Complication: Russia

The trade negotiations have also been taking place against a rapidly changing US tariff environment. India has been under pressure over its purchases of Russian energy. As recently reported in Gulte, US legislation has created the possibility of tariffs of up to 100% on countries that continue buying Russian energy, adding another layer to India’s negotiations with Washington. This creates an obvious complication for the trade talks.

India is negotiating over tariffs and market access with the US while simultaneously dealing with a broader American trade and sanctions framework that can affect the very tariff advantage New Delhi is seeking. That is why the agreement cannot be viewed purely as a commercial negotiation anymore. Trade, energy security and wider economic policy are increasingly overlapping.

Why The Final Stretch Is Proving Difficult

There is another important contradiction in the current situation. In September, Commerce Secretary Rajesh Agrawal said the India-US trade deal was “more or less” finalised, with the two sides working on a framework for preferential market access before signing it.

But by October, the US side was saying the deal was not imminent, while Sitharaman was describing the negotiations as having reached a plateau.
These statements don’t necessarily contradict each other.

A deal can be broadly settled at the political level while remaining unresolved on the specific provisions that determine its commercial impact. The last few percentage points of tariff, the exact list of products, regulatory concessions and safeguards can take much longer to negotiate than the broad framework. That appears to be where India and the US are now.

The Real Question Is No Longer Whether There Will Be A Deal

For months, the central question around the India-US trade negotiations has been: When will the agreement be signed? Sitharaman’s latest comments suggest a more useful question now: What is each side still willing to give up?

Both countries have an interest in expanding trade. Both have already made commitments. And both continue to say negotiations are ongoing. But the remaining issues appear to involve areas where concessions carry a higher cost, whether it is market access, agriculture, digital regulation, tariffs or the broader economic relationship.

That is what makes the word “plateau” important.
It does not mean the negotiations have collapsed. It means the relatively easier compromises may already have been made. The agreement is now sitting on the issues where moving even a little further could require one side to accept a much bigger economic or policy concession.

And until India and the US find enough room to move on those issues, the trade deal can remain technically close while still being surprisingly difficult to actually sign.