Sitharaman sees a ‘plateau’, but India-US trade deal may not be at a dead end yet: GTRI

India and the US could still conclude a limited interim trade agreement covering areas where negotiations have already been completed, even as the two sides appear to have little room left for further concessions, according to the Global Trade Research Initiative (GTRI).

The think tank said Finance Minister Nirmala Sitharaman's remarks on Monday that negotiations had reached a “plateau” need not contradict Commerce Minister Piyush Goyal's statement last week that India was ready to finalise an early, balanced and mutually beneficial interim agreement.

Also Read: India-US trade talks hit a plateau, with little room left to give or take, says Finance Minister Nirmala Sitharaman


Instead, the two positions could indicate that New Delhi is prepared to sign an interim pact based on what has already been agreed while being reluctant to make additional concessions, GTRI founder Ajay Srivastava said.

The assessment comes as India and the US continue negotiations over a bilateral trade agreement. Sitharaman said on Monday that the two sides had reached a point beyond which further give and take could prove “very, very difficult”, while maintaining that negotiations were continuing.

US tariff offer remains unclear

According to GTRI, one of the key uncertainties surrounding the negotiations is the tariff treatment the US would ultimately offer Indian goods.

Under the February 6 framework cited by GTRI, Washington had proposed reducing its reciprocal tariff on India from 25% to 18% in exchange for significant concessions from New Delhi.

However, GTRI said the US Supreme Court's February 20 judgment striking down the reciprocal tariff regime removed the original basis of that offer, leaving uncertainty over what tariff arrangement Washington could now provide.

The think tank said the US has yet to clarify the new tariff level, making it difficult to assess the value of an interim agreement for India.

GTRI also pointed to a 10% forced-labour tariff imposed by Washington on India despite New Delhi having restrictions on imports involving forced labour.

GTRI cautions against rushing into deal

Srivastava argued that India should agree to a trade pact only if it delivers durable tariff benefits and provides credible protection against arbitrary increases in US duties.

Trade between the two countries would continue even in the absence of an agreement, according to GTRI, although uncertainty surrounding tariffs could complicate pricing, contracts and investment decisions for Indian exporters.

Also Read: 'US deal could spur further liberalisation'

The think tank also flagged the possibility of additional US tariffs linked to India's purchases of Russian oil or allegations of excess manufacturing capacity.

GTRI argued that concluding a trade agreement would not necessarily eliminate the possibility of fresh tariffs, pointing to subsequent US tariff actions involving other trading partners after trade agreements were reached.

Against this backdrop, Srivastava said India should avoid accepting substantial concessions unless the agreement provides clear and lasting benefits.

Warning against unilateral concessions

GTRI also called on India to avoid making further unilateral concessions to Washington while negotiations remain unfinished.

“India should stop giving away concessions while the US trade deal remains unfinished,” Srivastava said.

The think tank said India has over the past two years reduced duties on several products of interest to the US, including motorcycles, bourbon, some pharmaceuticals and Ethernet switches.

It also pointed to India's decision to allow foreign direct investment in inventory-based e-commerce for exports and the removal of the equalisation levy on foreign digital platforms.

GTRI further cited the introduction of UPI fees from October 15, arguing that the move could benefit international card networks such as Visa and Mastercard.

According to Srivastava, granting concessions without securing reciprocal benefits reduces India's leverage at the negotiating table and could diminish Washington's incentive to conclude an agreement.

The think tank's position is that India should prioritise a deal that provides predictable and lasting market access rather than concluding an agreement simply to bring the prolonged negotiations to a close.