India must review US trade deal after SC tariff ruling, says GTRI

GTRI says the US Supreme Court's decision striking down Trump's global tariffs frees most Indian exports from reciprocal duties, prompting a reassessment of the new bilateral trade deal

The United States (US) Supreme Court striking down American President Donald Trump’s global tariff should prompt New Delhi to re-examine its trade deal with Washington, Delhi-based think tank Global Trade Research Initiative (GTRI) said on Friday.

 

The removal of reciprocal tariffs will free about 55 per cent of India’s exports to the US from the 18 per cent duty, leaving them subject only to standard most-favoured nation (MFN) tariffs as per global trade rules.

 

On the remaining exports, (i) Section 232 tariffs will continue — 50 per cent on steel and aluminium and 25 per cent on certain auto components — while (ii) products accounting for roughly 40 per cent of export value, including smartphones, petroleum products and medicines, will remain exempt from US tariffs, GTRI said in a report.

 

On Friday, on February 20, 2026, the US Supreme Court ruled that Trump exceeded his authority by imposing tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law intended for national emergencies. Chief Justice John Roberts held that IEEPA does not authorise unilateral tariff action and that the administration cited no statute permitting such use.

 

The ruling came weeks after India and the US issued a joint statement towards an interim trade agreement on February 7 stating the contours of the deal. As a first step, the US removed the 25 per cent punitive tariffs imposed on India ‘in recognition of India’s commitment to stop purchasing Russian Federation oil’. The tariff is expected to reduce further this month, from the existing 25 per cent to 18 per cent. A team of officials, led by Darpan Jain, the chief negotiator of the India–US trade deal, is heading to Washington on Sunday to discuss and finalise the deal’s legal text. Both sides aim to sign the deal by March.

 

According to the report, the decision effectively renders recent trade deals initiated or concluded by the US with the UK, Japan, the EU, Malaysia, Indonesia, Vietnam and India one-sided and useless. Partner countries may now find reasons to dump these deals.

 

“Trump could attempt to reimpose similar tariffs under Section 301 or Section 232, but those statutes require new investigations and public justification, delaying action and inviting further legal challenges. Also, such measures cannot serve as a universal enforcement tool. This ruling against Trump would reassert Congress’s primacy in trade policy, sharply curbing presidential latitude to weaponise tariffs and reshaping how future administrations wield emergency economic powers,” GTRI said.