Exlcusive: Indian Academic on What’s Derailing the Finalized Indo-US Trade Agreement

Despite India and the U.S. narrowing their differences, trade talks have hit a roadblock. According to BMI, a Fitch Solutions company, a breakthrough in the near future is unlikely as negotiations remain ongoing.

Bilateral trade talks were initiated following a meeting between Indian Prime Minister Narendra Modi and U.S. President Donald Trump in 2025, with the goal of achieving $500 billion in bilateral trade by 2030. By February 2026, New Delhi and Washington had announced a basic framework for an interim trade agreement.

However, in October 2026, Indian Finance Minister Nirmala Sitharaman said that negotiations for a final deal had reached a “plateau,” with further concessions being “very, very difficult” for both nations, according to Reuters. Amid persistent roadblocks and delays, the prospect of an interim trade deal is offering hope for progress in bilateral ties.

“We expect India and the US eventually to conclude a narrow interim trade deal, although the remaining differences make a near-term breakthrough unlikely,” BMI said in a report on the status of the India-US interim trade agreement, according to Business Standard.

Vision Times reporter Venus Upadhayaya spoke with Dr. Ram Singh, Professor and Head of the Centre for Distance and Online Education (CDOE) at the Indian Institute of Foreign Trade in New Delhi, about the causes of the impasse in trade talks and what to expect next.

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Vision Times: India and the U.S. are unlikely to see a major advance in trade negotiations in the near future, as the two sides remain split over market access, agriculture, purchase of U.S. goods, and India’s procurement of Russian oil, according to BMI (formerly Business Monitor International), a FitchSolutions company. Can you give us a background of this and help us understand what actually led to this situation?

Dr. Ram Singh: The impasse reflects a shift from tariff bargaining to a broader negotiation over certainty and strategic interests. The February framework narrowed tariff differences, but agriculture, market access and US purchase demands remain politically sensitive for India. Meanwhile, Washington’s pressure over Russian oil—and levy of additional tariff in forms of anti-dumping, CVDs, strategic industry tariffs (steel, copper, aluminium), and threat to complete economic alignment has complicated the bargain. 

The US demand of amendments in India GST [Goods and Service Tax], Corporate and digital tax law, domestic subsidies, sectoral caps on FDI, FCRA [Foreign Contribution Regulation Act] and FEMA [Foreign Exchange Management Act, 1999] regulations has gone well with New Delhi. India is seeking meaningful preferential access and tariff certainty, while resisting concessions without reciprocal gains. Thus, the issue is now much beyond tariff certainty to regulatory uncertainty including issues of trust, reciprocity and predictability.

Vision Time: BMI expects trade negotiations to carry on towards the Dec. 14–15 Group of Twenty summit in Miami, which could serve as the next political prop, although it considers an agreement by then unlikely. Why has it been delayed so much? Are their geopolitical factors behind this delay?

Dr. Singh: The delay reflects more than unresolved tariff issues; it reflects a widening strategic trust deficit. India’s trade diversification through deals with the UK, EU, New Zealand, UAE and EFTA has reduced pressure for short-term tariff relief at the cost of strategic autonomy in energy and defence procurement. 

Public rhetoric portraying India as a “hell-hole”, “dead economy” or “tariff king”, and its hyphenation with Pakistan, has further strained trust. With the February framework’s unique benefits diluted, and talks now described as “short strokes” and “not imminent”, breaking the deadlock will require substantial political investment by both sides.

Vision Time: While India and the U.S. have narrowed their differences, the remaining issues will be the hardest to resolve, the BMI report observed. All countries have differences on trade issues and that is the case for the U.S. as well. Why is this equation with India so unique?

Dr. Singh: First, agriculture is not uniquely contentious with India; Washington faces similar market-access difficulties with established partners such as Canada, Australia, New Zealand, the UK and EU. Second, what makes India distinctive is the widening linkage of trade with energy, strategic autonomy and geopolitical choices, particularly Russian oil. 

Third, the perception of moving goalposts and even the finish line—a concern also articulated by Canada’s Mark Carney—has complicated trust. After reportedly resolving nearly 99 percent of issues, India now seeks certainty that concessions will deliver the February framework’s promised benefits, not another negotiating reset.

VT: Earlier this week, Finance Minister Nirmala Sitharaman said the two partners had reached a plateau in the negotiations, beyond which it was difficult for either side to offer further concessions. Why did Sitharaman make such a comment?

Dr. Singh: In fact, the trust has weakened between the US and India significantly with President Trump as the US President and it is evident at strategic, operational and tactical levels (QUAD, F404 delays, price-haggling on F414, pressurizing Indian companies to invest in US with tariff threats/trade investigations), limiting India’s willingness to make further concessions. Moreover, Washington’s tactical use of tariffs and tariff threats even during negotiations has reinforced New Delhi’s concerns about policy unpredictability. 

Given this scenario, India increasingly wants institutional assurances, not merely tariff concessions—forward-MFN, investor-MFN, sunset and mandatory-review clauses, snap-back provisions and TRQs. Lastly, US tariff actions affecting partners even after concluded agreements have heightened India’s insistence on enforceable safeguards. Thus, Sitharaman’s “plateau” reflects a trust-and-certainty deficit, not simply remaining tariff differences.

VT: Is there anything else that you would like to share with us on this topic

Dr. Singh: The larger issue is the changing global order. US retrenchment from parts of the global landscape, China’s rise and the growing weight of emerging powers are exposing the limits of institutions built around the UN and Bretton Woods architecture.