Indian Finance Minister Nirmala Sitharaman says tariffs have increasingly become “weaponised” as countries seek to address trade imbalances, while negotiations between India and the United States over a trade agreement remain difficult.
Speaking at the Munich Security Conference, Sitharaman said tariffs were traditionally used within an established framework as part of trade negotiations, with countries exchanging greater market access and other concessions.
She argued that trade imbalances are now increasingly being addressed through measures outside the traditional negotiating process.
Sitharaman said countries previously relied primarily on negotiations to identify trade disparities and determine how they could be corrected. That could involve one country providing greater access to its domestic market in exchange for reciprocal concessions from its trading partner.
She said India’s own trade relationship with China demonstrates why negotiations remain important, pointing to India’s substantial trade deficit with Beijing.
According to Sitharaman, India could theoretically use its trade imbalance with China to justify a more aggressive approach, but such disputes ultimately require dialogue, market-access negotiations and compromise.
Her comments come as India and the United States continue negotiations over a bilateral trade agreement.
Sitharaman described the proposed agreement as difficult and “rigorously negotiated,” saying the two countries may have reached a plateau where offering additional concessions has become increasingly challenging.
However, she said negotiations could continue if both sides identify areas where further compromises remain possible.
Trade imbalances are among the issues shaping the negotiations. India currently maintains a trade surplus with the United States, and Sitharaman acknowledged that Washington would naturally seek measures aimed at reducing its deficit.
She said the challenge is finding a mutually acceptable way to address those differences while preserving the role of negotiation and reciprocal market access.
The finance minister’s remarks come amid wider international debate over the growing use of tariffs as an instrument of economic and trade policy.
