Sensex falls 650 pts from day's high, Nifty below 22,450, as FM says trade deal talks with US 'reached a plateau'

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Benchmark indices Sensex and Nifty significantly pared their gains on October 5 as Finance Minister Nirmala Sitharman said trade deal negotiations with US have "reached a plateau".

Speaking at an event in New Delhi, she said, "The agreement negotiations are still ongoing, although we'd like to believe that both the sides have reached a plateau beyond which giving or taking might be very, very difficult. But maybe if there are rooms to operate from, both sides would do it."

Sitharaman said any further give-and-take would be “very very difficult” for both sides after a “hard and rigorously negotiated agreement".

Sensex fell 650 points from day's high while Nifty was trading below 22,450-mark.

At 11:50 am, the Sensex was up 86.80 points or 0.12% at 71,996.50, and the Nifty was up 21.35 points or 0.1% at 22,443.30. About 1,811 shares advanced, 2,106 shares declined, and 199 shares were unchanged.

"One thing about the US agreement which is yet to get finalised, it's been a hard and very vigorously negotiated agreement, The negotiations are still ongoing although we would like to believe both sides have reached a plateau beyond which giving or taking might be very, very difficult. Maybe if there are rooms to operate from both sides would do it. But what is the predominant feature in trade relations between India and US, the trade balance is very much in our favour, and the deficit is theirs, so they would want to reduce that imbalance and their desire would be to see as much as possible from their point of views making up for all what they have lost all these years.

"From our side in a way I am not comparing at all, as such templates can exist for different countries and parts of the world that principal of trade imbalances which has to reduce for US for them to consider anything more, I would think that is the way the US would look at China or India would look at China. The trade imbalance for India with China since 2014 has been growing exponentially. So when you are talking of trade imbalance to be the sole criteria to reduce imbalance to what extent beyond negotiations can you do.

"Negotiations used to be the platform through which countries would highlight the discrepancies and lopsidedness and say we want to correct it by opening up access to some goods while some goods can also be sent to them. That was how negotiations went. Now, the imbalance is being sought to be addressed through other means. Tariff has become weaponised, tariff was an instrument of negotiations and had a certain framework within which you apply it. Today framework is there, tariffs are moving up. I can take the same position, can I not with China? It is so lopsided, it is terribly against me, but no you can't, you have to negotiate, you have to give and take," she said at the Munich Leaders Meeting.

Meanwhile, US Trade Representative Jamieson Greer said ​on Thursday the ‌Trump administration was working with India to finalize a ​bilateral trade deal, ​but added an agreement was ⁠not imminent.

Greer said ​he had "a very constructive ​conversation" with Trade Minister Piyush Goyal at the G20 ​trade ministers meeting ​in Milwaukee this week and that ‌officials ⁠from the two countries were continuing the conservation.

"I don't think there's ​something imminent, ​but ⁠we truly have identified the universe ​of items that ​are ⁠sticking points. We're working diligently toward them," he ⁠added.