The World Trade Organization says its 160 members have failed to agree a global customs pact drawn up in meetings in Bali last December.
The Trade Facilitation Agreement would have streamlined global customs procedures, and should have been finalised by Thursday.
But it was blocked over a number of rifts, including India’s demands for concessions on the stockpiling of food.
The WTO said it had not been possible to find a breakthrough.
“We have not been able to find a solution that would allow us to bridge the gap,” WTO director-general Roberto Azevedo said.
He asked WTO members “to reflect long and hard on the ramifications of this setback”.
And US ambassador to the WTO, Michael Punke, said that the failure to agree a deal had “put this institution on very uncertain new ground”.
The WTO had seemed to be on the verge of reaching its first comprehensive agreement since it was founded in 1995.
But India vetoed the proposal at a late stage, demanding greater concessions over farm subsidies and agricultural stockpiles.