Jayanta Roy Chowdhury
New Delhi, Feb 21 (UNI) A US Supreme Court decision curbing President Donald Trump’s emergency tariff powers could lower effective duties on Indian goods and boost exports in sectors such as textiles and pharmaceuticals, to 10-13.5 per cent while reshaping the terms of an interim trade deal between the two countries.
Within hours of the ruling, which struck down most of Trump’s sweeping “reciprocal” tariffs imposed under the International Emergency Economic Powers Act (IEEPA), Trump announced a new 10 per cent baseline global tariff under Section 122 of the Trade Act, applying temporarily to trading partners including India while negotiations continue.
Trade analysts believe this will give a temporary bump to Indian exports to the US which in calendar year 2025 had stood at USD 103.82 billion, according to US government statistics. India’s exports to the US have doubled over the last five years, widening the trade balance in India’s favour.
With the IEEPA-based tariffs struck down, commerce ministry officials said on condition of anonymity that the legal basis for the 18 per cent reciprocal rate is weakened. India could instead face the newly announced 10 per cent global tariff layered on top of the United States’ most-favoured-nation (MFN) rate of roughly 3.5 per cent on many goods, implying an effective rate of about 13.5 per cent, unless negotiators revise the terms, analysts said.
“Goods exports from India will attract between 10-13.5 per cent duty, with an average of 12-12.5 per cent. However, the larger question that needs to be resolved is will India and US have to sit down together again to rework parts of the trade deal,” said Prof Biswajit Dhar, former WTO chair at Indian Institute of Foreign Trade.
The US Court’s decision leaves intact Washington’s ability to impose narrower tariffs under other laws, including Section 232 of the Trade Expansion Act on national security grounds and Section 301 of the Trade Act of 1974 addressing unfair trade practices.
”So potentially we could come back to the 18 per cent tariff regime, but such an eventuality seems not likely,” commerce ministry officials, however, pointed out.
Officially, the Ministry of Commerce and Industry said on Saturday that it is closely analysing US Supreme Court judgement on tariffs.
In a communique released here on Saturday, the Ministry said, “We have noted the US Supreme Court judgement on tariffs yesterday. President Trump has also addressed a press conference in that regard. Some steps have been announced by the US Administration. We are studying all these developments for their implications.”
On Saturday morning, US President Donald Trump insisted that the India-US trade deal remains firmly on track and will not be affected by the Supreme Court’s ruling against his emergency tariffs, asserting that India will continue paying tariffs under the pact while the US will not.
Speaking to reporters at the White House, Trump said, “I think my relationship with India is fantastic, and we’re doing trade with India. India pulled out of Russia. India was getting its oil from Russia. And they pulled way back at my request, because we want to settle that horrible war where 25,000 people are dying every month.”
