India’s exporters are facing new uncertainty about how much tariffs they will have to pay to the United States following a dramatic legal battle over US President Donald Trump’s worldwide tariff strategy. This comes after a recent US Supreme Court verdict that reversed extensive tariffs imposed by Trump under emergency powers, leading the White House to impose a new 10% global duty on imports, affecting all trading partners, including India.
The situation has sparked questions among Indian exporters and policymakers over whether the 10% levy will apply in place of previous arrangements, and how this will interact with an interim trade deal the two sides are working on. With tariff rates having shifted rapidly in recent months, clarity over duties on Indian goods shipped to the US is critical for sectors ranging from textiles to pharmaceuticals.
Supreme Court Ruling and Trump’s New Executive Order:
In a 6–3 decision, the US Supreme Court ruled that the Trump administration had exceeded its legal authority under the International Emergency Economic Powers Act (IEEPA) when it imposed wide-ranging tariffs on imported goods in 2025. The court held that IEEPA does not grant the president power to levy customs duties in peacetime without explicit congressional authorisation.
The IEEPA-based “reciprocal” tariffs were part of Trump’s attempt to combat what he saw as unfair trade practices. Under those tariffs, India faced higher charges on its commodities entering the United States, sometimes as high as 50%, with punitive features connected to India’s Russian oil imports. However, with the Supreme Court’s finding compromising that legal foundation, the tariffs were essentially repealed.
Instead of letting the tariffs expire, Trump swiftly issued an executive order using Section 122 of the Trade Act of 1974, a separate legislative authority, to impose a 10% “temporary import surcharge” on goods into the US from all nations. In the absence of an act of Congress or another legal mechanism, this tariff may stay in effect for a maximum of 150 days after it goes into effect on February 24, 2026. Under this new order, all trading partners including India would be subject to a flat 10% tariff on imports. A White House official confirmed that it will apply to countries that have existing trade agreements with the US and will remain in force until “another authority is invoked.”
Impact on India’s Tariff Burden:
Over the past few months, India’s tariff responsibilities have changed significantly. Trump imposed high duties on Indian exports at the beginning of 2025: a 25% reciprocal tax and an additional 25% “punishment” penalty related to US complaints about India’s oil purchases, for a total of 50%. Following the announcement of an interim trade agreement between the US and India, which included Washington decreasing its tariff demands and New Delhi agreeing to cut some of its energy deals with Russia, these punitive duties were later lowered to 18%.
However, the Supreme Court’s ruling dismantled the legal underpinning for those tariffs. With the new 10% global tariff, India’s effective duty rate on goods entering the US will drop from the earlier 18% arrangement under the interim deal. This is a significant reduction, though still above the most-favoured-nation (MFN) baseline rate of around 3.5% that applied before the tariff escalation.
The current tariff structure means that Indian exporters could see a 10% additional charge on top of regular duties already applied to specific products, even as the interim trade deal negotiations move forward. For example, if a product normally faced a 5% base tariff in the US, the new surcharge would raise the combined duty to roughly 15%.
Officials in Washington have highlighted that all parties should honour existing trade deals, indicating that the tariff framework may evolve as negotiations progress. Meanwhile, India’s government has said it will study the implications of both the Supreme Court ruling and the new executive order, while planning further discussions with US trade negotiators.
Conclusion:
In the short term, from February 24, 2026, India’s exporters will contend with a 10% global tariff on US imports, replacing the higher tariff arrangements struck down by the Supreme Court. While this is a relief compared with some earlier rates, the additional duty remains higher than the pre-tariff baseline and adds complexity for businesses planning exports to the US.
Over the medium term, negotiations between India and the US will play a decisive role in shaping how tariffs eventually settle. Whether the interim trade deal gets formalised, potentially reinstating a tailored tariff structure or whether both sides negotiate new provisions will determine the final duties India faces.
For now, exporters and policymakers alike are adjusting to a fluid and evolving tariff landscape, balancing legal developments, executive actions, and strategic negotiations with one of India’s largest export destinations. With official clarification still emerging, India’s business community will be watching closely as tariff policy continues to unfold.
