India's Finance Minister Nirmala Sitharaman said trade discussions with the U.S. have reached a "plateau," citing persistent tariff disagreements that constrain negotiating room for a comprehensive deal.
The U.S. maintains tariffs on steel and aluminum from India, initially imposed under President Trump's administration. India responded with retaliatory duties on almonds, walnuts and apples. The two-year Treasury yield rose to 4.89 percent, reflecting market pricing of extended policy gridlock.
Prolonged trade disputes introduce duration risk for investors holding long-term assets tied to global supply chains. Credit spreads for companies reliant on international commerce are widening as revenue volatility increases. The tariff regime makes it difficult for negotiators to find common ground on market access, and the stagnation is expected to delay progress on other economic cooperation initiatives between the two nations.
Sitharaman's comments suggest a lack of new proposals or significant concessions from either side. Officials may use the G20 Finance Ministers and Central Bank Governors meeting scheduled for February 2027 to explore potential pathways for resolution, though a breakthrough remains uncertain.
