India’s trade position is facing growing pressure as the country manages a trade surplus with the United States while running a large and difficult-to-reverse deficit with China.

Finance Minister Nirmala Sitharaman recently said India-U.S. trade talks had reached a “plateau”, suggesting that further concessions from either side could be difficult.

The challenge goes beyond the negotiations. India depends on China for several goods that cannot be easily replaced in the short term. This makes the trade deficit with China more structural in nature.

At the same time, India’s trade surplus with the U.S. could come under pressure from higher tariffs on Indian goods. The growing use of artificial intelligence may also affect some export sectors and change global trade patterns.

Together, these factors create a difficult trade environment for India. The country must protect its export competitiveness while reducing supply-chain risks and managing its dependence on major trading partners.

The situation highlights the need for India to diversify export markets, strengthen domestic manufacturing and build more resilient global supply chains.