India-US Trade Talks Reach a "Plateau": Why Further Concessions Are Hard and How the EU Deal Differs
On 5 October 2026, speaking at a Munich Security Conference event in New Delhi, the Union Finance Minister said India-US trade talks have reached a "plateau". Beyond this point, more demands or more concessions (giving up something in a deal) from either side would be "very, very difficult".
The Finance Minister said tariffs were earlier a tool used inside negotiations, but are now being "weaponised": used as pressure to reduce the US trade deficit with India, instead of solving it through talks.
The comments came after a new US law, signed on 18 September 2026, allows the US President to put tariffs of up to 100% on the biggest buyers of Russian oil and gas. India and China are among the largest buyers of Russian crude.
Talks on a bilateral trade deal began in February 2025. In late September 2026, the two sides gave mixed signals: Indian officials suggested the deal was nearly done, while the US Trade Representative said it was not imminent.
In contrast, the Finance Minister described the India-EU Free Trade Agreement as a balanced deal: India opened 92.5% of its tariff lines (about 97% of trade by value), the EU opened about 99% by value, and both sides protected sensitive farm sectors such as dairy. She added that Russian oil imports did not play a deciding role in the EU talks.
India is also preparing a new model Bilateral Investment Treaty to replace its 2016 model, with Cabinet approval pending. It hopes to sign investment treaties with at least three more countries, including Canada and Russia, by December.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement (BTA) is a trade deal that India and the United States are negotiating. Its aim is to cut tariffs and other trade barriers between the two countries so that both can sell more to each other. The US is India's largest export market, so the terms of this deal matter a lot for Indian jobs in sectors like textiles, gems and jewellery, engineering goods and pharmaceuticals. The talks have been shaped by repeated US tariff actions since 2025.
The "plateau" remark shows that the BTA talks have hit the hard core issues: the US trade deficit with India, India's farm and dairy red lines, and the new threat of tariffs linked to Russian oil. With tariffs used as pressure outside the talks, both sides have less room left to trade concessions.
Free Trade Agreements: Concept and WTO Framework
A Free Trade Agreement (FTA) is a deal between two or more countries to remove or sharply cut import taxes (tariffs) on most of the goods they trade with each other. Each country still keeps its own tariffs for countries outside the deal. Modern FTAs also cover services, investment, government buying and intellectual property. India's FTAs go by different names, such as CEPA, CECA, ECTA and TEPA, but they are all forms of this idea.
The Finance Minister held up the India-EU FTA as a model of a balanced negotiation in which both sides opened most of their markets while protecting sensitive farm sectors. This is the kind of give-and-take that India says has become very difficult in the US talks, where tariff threats sit outside the negotiating framework.
Bilateral Investment Treaty (BIT) and India's Model BIT (2016)
A Bilateral Investment Treaty, or BIT, is an agreement between two countries to protect each other's investors. If a company from one country builds a factory or buys a business in the other, the BIT promises it fair treatment and protection against unfair seizure. If a dispute arises, the investor may be able to take the host country to international arbitration instead of only to local courts. India's Model BIT is the standard template India uses when it negotiates these treaties.
Along with trade deals, the government is preparing a new model BIT to replace the 2016 template, with Cabinet approval pending. India aims to sign investment treaties with at least three more countries, including Canada and Russia, by December, so that investment protection keeps pace with its new trade agreements.
- Date of the "plateau" remark: 5 October 2026 (Munich Security Conference event, New Delhi)
- India-US trade talks began: February 2025; "Mission 500": USD 500 billion bilateral trade by 2030
- US tariffs on India peaked at 50% (August 2025); interim framework cut the reciprocal rate to 18% (February 2026)
- US Supreme Court on IEEPA tariffs: 20 February 2026
- US law allowing up to 100% tariffs on the largest buyers of Russian oil and gas: signed 18 September 2026
- India's exports to the US: about USD 42.79 billion in April to August (current financial year), against USD 40.39 billion a year earlier
- India-EU FTA: concluded 27 January 2026; India opened 92.5% of tariff lines (about 97% by value); EU about 99% by value
- India imports about 80% of its fertiliser needs
- India's Model BIT: 2016; local remedies for 5 years; new model under revision