India-US Trade Talks Hit ‘Plateau’ as Concessions Stall: Sitharaman

New Delhi: Amid the rising uncertainty over the ongoing India-US trade deal discussions, Union finance minister Nirmala Sitharaman on Monday said that negotiations for the India-US trade agreement have reached a “plateau”, with both sides facing difficulties in making further concessions even as talks continue. Besides, she also revealed that a new template for bilateral investment treaties is ready and is expected to get Cabinet approval soon in a bid to make it more investor-friendly.

While speaking at the Munich Leaders Meeting here, Sitharaman also said that there could still be room for movement if both sides find areas where they can negotiate further. “It’s been a hard and very rigorously negotiated agreement. The agreement negotiations are still ongoing, although we'd like to believe that both sides have reached a plateau beyond which giving or taking might be very, very difficult,” the finance minister said.

Her comments come days after US Trade Representative Jamieson Greer said that the India-US trade deal was in the “short strokes” but not imminent, signalling that negotiations remain active even as the two countries work through unresolved issues. Greer, speaking after meeting commerce and industry minister Piyush Goyal on the sidelines of the G20 Trade Ministers’ Meeting in Milwaukee, said the two sides had identified the “universe” of sticking points and were working to resolve them.

However, Sitharaman said that a predominant feature of India-US trade relations is the trade imbalance in India’s favour, with the US seeking to reduce its deficit. “Naturally, the deficit is there on their side, or the balance is unfavourable for the US, so they would want to reduce that imbalance,” she said, adding that Washington would seek to make up, from its perspective, for what it believes it has lost over the years.

Drawing a comparison with India’s trade relationship with China, the minister said that trade imbalances have traditionally been addressed through negotiations, with countries seeking greater market access for their goods and services. “However, tariffs are increasingly being used as a tool to address trade imbalances. Tariffs have become weaponised. Tariff was an instrument of negotiation, and tariff had a certain framework within which you would apply it. Today, the framework is there, but tariffs are going,” she said.

Elaborating the new template on bilateral investment treaties, Sitharaman further said that India has continued negotiations on investment protection agreements even as the new template is being finalised. “It is being prepared over the last one-and-a-half years and it seeks to address shortcomings in the model approved in 2016 and provide sharper protection to investors from both sides. The template will be approved shortly, but in the meanwhile, we've not halted the process. We are negotiating with countries with a lot more of those elements which are in the new template,” she said.

On climate change, the finance minister said that at every stage, India has only improved its climate commitments, not just in the form of commitments, but also in fulfilling them much ahead of the deadline. “India leads in the rapid adoption of solar energy, with every citizen being given an opportunity through rooftop solar and farmers being supported with solar pumps. Green hydrogen, advanced chemistry cells and battery storage are all being given big support by the government. There is a lot of emphasis on climate-resilient steps, while ensuring that even small manufacturers quickly adopt green ways of doing business with government support,” she added.