India-US trade talks stall at a 'plateau' as US law opens door to 100% tariffs

Finance Minister Nirmala Sitharaman said on 5 October that trade talks with the United States had reached a plateau, where further concessions would be “very, very difficult” for both sides, Reuters reported. The two countries have been working on a deal since February 2025.

Her remarks followed US Trade Representative Jamieson Greer’s statement the previous week that an agreement was not imminent. They also came 17 days after President Donald Trump signed a law that lets him impose tariffs of up to 100% on the largest buyers of Russian oil and gas, a group that includes India.

Where the talks stand

India and the US announced a framework in February 2026. A US fact sheet dated 10 February said the US would cut its reciprocal tariff on India from 25% to 18% and that the President had removed an additional 25% tariff linked to India’s purchases of Russian oil. The fact sheet said India “intends to buy more American products and purchase over $500 billion of U.S. energy, information and communication technology, coal, and other products”.

The 18% rate never took effect. On 20 February, the US Supreme Court struck down the reciprocal tariffs imposed under the International Emergency Economic Powers Act, Business Today reported. Washington replaced them with a temporary 10% duty under Section 122 of the Trade Act of 1974, which applied from 24 February.

On 29 July, Commerce Minister Piyush Goyal said the first tranche of the deal had been finalised but would come into operation “as soon as the United States is able to ensure that India gets a comparative advantage over its competitors”, PTI reported. He referred to countries in India’s neighbourhood and in ASEAN.

Sitharaman said the trade balance favours India and criticised the growing use of tariffs to correct trade imbalances, Reuters reported. Ajay Srivastava of the Global Trade Research Initiative urged India to stop making concessions while the deal remains unfinished.

What is in force and what is not

US tariffs on Indian goods: status as of 11 October 2026

• 10%Section 301 duty on Indian goods since 24 July 2026, on top of normal duties, with exclusions (in force)
• 18%reciprocal rate in the February 2026 framework (never took effect)
• Up to 100%tariff the Russia sanctions law allows on top Russian oil buyers (authorised, not imposed)
• $42.79 bnIndian goods exports to the US, April-August 2026, up from $40.39 bn a year earlier

The 10% Section 301 duty came out of a US investigation into forced labour. The US Trade Representative had proposed 12.5% for India in June, then set it at 10% after India amended its foreign trade policy on 14 June to bar imports made with forced labour, Outlook Business reported. Goods already under Section 232 duties, such as steel, aluminium and some auto parts, are exempt from the Section 301 duty, according to the ELP law firm’s summary of the US notice. Business Today reported in February that the Section 232 rates were 50% on steel and aluminium and 25% on certain auto parts.

What the Russia oil law does

The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (H.R. 5334) was signed on 18 September, according to a White House statement quoted by Outlook India. It allows the President to impose tariffs of up to 100% on imports from the five largest buyers of Russian crude and gas, a list reassessed every 180 days. The President decides the rate, and the law does not apply a tariff on its own. The Act also sanctions Russian banks, Russia’s energy and defence sectors and the “shadow fleet” of tankers, Al Jazeera reported.

Democratic Senator Richard Blumenthal, a co-author, said after the House passed the bill on 16 September: “To China and India: you better clean up your act. Buy your oil and gas somewhere else,” The Pioneer reported. House Minority Leader Hakeem Jeffries opposed the bill, warning its tariff powers would raise costs for American households, according to Al Jazeera.

India’s Russian crude imports fell to about 2.08 million barrels a day in August (about 45% of crude imports) from about 2.82 million in July (nearly 56%), Kpler data cited by Outlook India show.

The Ministry of External Affairs said on 17 September that India remains “firmly committed to ensuring energy security for its 1.4 billion people” and “will continue to do so through diversified sourcing and on the basis of evolving market dynamics”, PTI reported. It said India would take necessary measures to protect its trade and economic interests. External Affairs Minister S. Jaishankar raised the law with US Secretary of State Marco Rubio in New York on 23 September, writing on X: “Reiterated India’s interests and concerns with regard to SRIA (Sanctioning Russia and Iran Act).”

Reuters noted the bind for New Delhi: cutting Russian purchases could raise fuel prices or strain public finances, while continuing them could hurt exports to the US, India’s largest market.