India's Finance Minister Sitharaman Seeks Global Trade Expansion Amid Uncertainty

Finance Minister Nirmala Sitharaman said on Monday that a bilateral trade deal with the United States alone cannot be the sole factor in easing global uncertainty. The statement came shortly after India and the US decided to postpone talks on an interim trade deal in the wake of the US Supreme Court outlawing reciprocal tariffs introduced under President Donald Trump. The two countries had on February 7 issued a joint statement on the framework for the deal. The minister said it was “too soon” to assess the implications of the US court ruling and subsequent new tariff announcements by the Trump Administration under Section 122. She added that the Ministry of Commerce and Industry is reviewing the situation and will decide when to resume negotiations. Citing strong macroeconomic fundamentals and policy stability, Sitharaman said India should naturally attract foreign investment, though geopolitical factors may be restraining inflows. “You would expect funds to flow toward economies like India. If they don’t, all of us will have to see what is holding them back,” Sitharaman said after addressing the board of the Reserve Bank of India. Her remarks come as foreign investors returned to Indian equities, buying $1.7 billion so far this month after January’s $3.3 billion outflow. Still, inflows lag some Asian peers, and a record $19 billion exited in 2025, reportedly due to delays in a US trade pact and muted earnings growth. “There is something else, probably strategic, probably global politics,” Sitharaman said on the reasons behind the subdued inflows. India and the US recently deferred a key meeting on an interim trade pact following the ruling, prompting both sides to reassess the proposed tariff framework. The shift, analysts say, could allow India to revisit terms outlined in a February 7 joint statement, which some experts viewed as overly favourable to Washington and inconsistent with multilateral norms that permit developing economies to maintain relatively higher tariffs. “Uncertainties have continued to be a worry always, and I wish, whenever the agreement gets done, gets done, and I don’t see that that being the only reason to abate any uncertainty,” Sitharaman said. She added that India remains committed to expanding trade ties, citing agreements with the European Free Trade Association, Australia, New Zealand, United Arab Emirates, United Kingdom and completion of trade deal talks with the European Union. “We want the Indian economy to benefit from global trade and wider market access,” she said.