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Informist, Monday, Oct. 5, 2026

 

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--Sitharaman:EU-India trade deal respects sensitivity on agri for both sides 
--CONTEXT: Finance Minister Sitharaman speaks at Munich Security Conference 
--Sitharaman: Everybody has broken WTO laws, nothing left to be respected 
--Sitharaman: US-India trade deal negotiations have reached a plateau 
--Sitharaman:Very difficult to give, take more in India-US trade negotiation 
--Sitharaman: Trade pacts to keep national interest, middle class in mind 
--Sitharaman: Trade imbalance with China growing exponentially since 2014 
--Sitharaman: Tariffs have become weaponised 
--Sitharaman: Addressing trade imbalance basis of modern trade deals 
--Sitharaman: Trade deals turning away from spirit of negotiation 
--Sitharaman: EU-India trade deal to benefit labour-intensive sectors, jobs
--Sitharaman: Multilateralism, bilateralism not mutually exclusive 
--Sitharaman: Multilateralism has weakened, but will not go away 
--Sitharaman:Multilateral institutions have weakened rapidly in recent times 
--Sitharaman: Speaking with Canada on bilateral investment protection 
--Sitharaman:Aim to conclude Canada investment protection pact by early 2027
--Sitharaman:Cabinet to approve new template for bilateral invest protection 
--Sitharaman: Want to move towards higher reliance on nuclear energy 
--Sitharaman: Plan for nuclear energy network through small modular reactors 
--Sitharaman: Fertiliser prices a challenge for us since COVID 
--Sitharaman:Not sustainable for any country to buy fertiliser at this level 
--Sitharaman: Cannot help but give fertiliser subsidy to farmers 
--Sitharaman: Alternatives to Hormuz shipping unviable or unavailable
--Sitharaman: Situation of "doom" if trade through Malacca Strait affected 
--Sitharaman: Food security at high risk due to shipping disruption 
--French minister:Geopolitics added sense of urgency for EU-India trade deal 
--CONTEXT: French Minister Haddad speaks at Munich Security Conference 

 

NEW DELHI – The rigorous and long-running negotiations between India and the US have reached a plateau where giving or taking further concessions may be "very, very difficult", Finance Minister Nirmala Sitharaman said Monday. She said the US was now looking to address its past trade deficit with India through the bilateral agreement before moving forward.

 

"Negotiation used to be the only platform through which countries could highlight the discrepancies...now the imbalance is being sought to be addressed through other means," Sitharaman said at the Munich Leaders Meeting convened by the Munich Security Conference in New Delhi. She highlighted how India's trade deficit with China had widened "exponentially" since, and how this approach could influence both India and the US to look at trade with China.

 

Modern trade deals may not look to address these imbalances rather than be settled just on the spirit of negotiation, a sentiment that was not prevalent a decade ago, the finance minister said. Still, the negotiations between India and the US are ongoing and the two sides are looking for room to operate towards more concessions and a finalisation of the deal. India would enter into trade pacts keeping its national interest and its middle class in mind, which it has done when signing recent deals with major trading partners like the European Union, she said. 
 

India and the US had announced an interim trade deal in February, under which Washington scrapped the penal tariff of 25% on Indian goods and cut the reciprocal tariff to 18% from 25%. However, later that month, the US Supreme Court quashed the reciprocal tariffs imposed by US President Donald Trump. Currently, the Trump administration has imposed a blanket 10% tariff on all goods entering the US. The recently passed Lindsey Graham Bill, which Sitharaman named in her comments as part of a weaponisation of tariffs, allows the US Congress to impose sanctions of up to 100% on Indian goods exported to the US.

 

The finance minister said India was dealing with trade challenges without turning protectionist, highlighting the trade deal between India and the European Union. Dubbed the "Mother of All Deals", the final draft of the trade pact to be signed in December opens up 92.5% of India's tariff lines and 97% of trade value with the bloc, Sitharaman said. Conversely, the European Union has also opened up 99% of trade in terms of value.

 

Both sides have been able to respectfully agree on sensitive areas while finalising the deal, which has kept areas such as specific agricultural items out of free access, she said. The India-EU agreement will boost labour-intensive sectors and the increased exports will help create jobs, particularly for micro-, small and medium enterprises, Sitharaman said. The negotiations in modern trade deals have also become more granular to ensure supply chains are not affected, she said. 

 

Europe had approached the trade deal with a sense of diversification and economic security, France's Minister Delegate for Europe Benjamin Haddad said at the panel with Sitharaman. The fragmented geopolitical climate, with respect to the US trade barriers under Trump, Russia's aggression in Ukraine, and the outbreak of war in West Asia had all added to a sense of urgency in finalising the deal with one of its major trading partners, he said. India-EU trade was worth nearly $139 billion in 2025-26 (Apr-Mar), up 9.5%.

 

In the wake of the trade deal, Sitharaman said bilateralism and multilateralism were not mutually exclusive, which Haddad agreed with. The Indian minister said the rapid decline of multilateral organisations like the World Trade Organisation in recent years had made India more confident in going with a bilateral approach. Even though multilateralism has not gone and will not go away, the balance has tilted towards bilateral agreements as the institutions to guide countries into a broad framework have become weaker, she said.

 

"Ultimately, you're tailoring the agreement to keep national interest alive, but (also) to survive in a very challenging global environment where no WTO-related laws have been left to be respected," Sitharaman said. "Everybody's broken the law here and there and so you're making it up now."

 

FOOD, ENERGY SECURITY

Global food security has been threatened due to the disruptions to vital shipping corridors in the Strait of Hormuz and the Red Sea, Sitharaman said. For India, this comes through the high price of not only mobility-linked fuels such as petrol and diesel but fertilisers, 80% of which is met through imports. 

 

"It is just not possible for any country to sustain buying it at that level," the finance minister said. "The price itself has been a big challenge for us from the time of COVID."

 

However, India would continue its highly subsided rates and continuous supply of fertiliser to farmers, who are marginal and would not be able to afford global prices whatsover, she said. In the long haul, domestic capacity for urea and phosphates production are being increased. India was also trying to find newer sources for fertiliser supply. The Ministry of Shipping was working to find alternative routes for procurement but shipping lines were either unavailable or commercially unviable due to high insurance premiums, the finance minister said. Asked about the impact of any disruption in the Strait of Malacca in South East Asia, Sitharaman noted this was one of the only alternatives and said it could lead to "doom".

 

Answering a question on India's renewable energy targets, she said India wants to move to higher reliance on nuclear energy and away from fossil fuels. However, the country doesn't envision large installations but the setting up of smaller modular reactors, she said. The Nuclear Power Corp. of India is working to develop indigenous reactors. India was also moving to develop batteries to leverage its surplus solar power capacity, with other investments in chemical technology ongoing.

 

BILATERAL INVESTMENT PROTECTION

Sitharaman said that the Union Cabinet was also working to approve an update to the decade-old template on bilateral investment treaties. The last template from 2016 was not working well for India and it had recently signed bilateral investment protection agreements with Saudi Arabia, the United Arab Emirates, and Oman, among others on the basis of an updated framework. This new framework would be used alongside free-trade agreements to cement more business coming into India and would be beneficial to investors of both the sides, she said. 

 

"Now, that agreement goes beyond the 2016, brings in elements which are a lot more sharp focused and to the benefit of investors from both sides," the finance minister said. "...negotiations have started with Canada, for instance, on bilateral investment protection, keeping in mind the elements which are likely to get approved by the Cabinet."

 

India should be able to conclude bilateral investment protection pacts with three more countries by December if things go well, with negotiations on with several countries including Russia, Sitharaman said. The investment agreement with Canada would move apace with the talks on a Comprehensive Economic Partnership Agreement with an aim to conclude by the end of December or early 2027, she said. The fifth phase of talks between India and Canada on the broader partnership began Monday.  End

 

US$1 = INR 96.30

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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