The global uproar over US tariffs has intensified again. This is primarily due to the US Supreme Court striking down President Donald Trump's global import tariffs by a 6-3 majority. The court, led by Chief Justice John Roberts, clearly stated that the president had exceeded his authority and imposed these tariffs, which are illegal. Immediately following this decision, Trump issued a new announcement on February 20, further fueling global trade unrest. Trump's announcement stated that a temporary additional 10 percent tariff would be imposed on goods imported into the US for 150 days, starting February 24, 2026, which has again increased uncertainty in global trade.
With this decision, the reciprocal tariff on Indian products will now be reduced to just 10 percent. The US had previously imposed a 25 percent tariff on India in August. Later, an additional 25 percent tariff was imposed on India due to its purchase of crude oil from Russia, bringing the total tariff to 50 percent.
Relief for Indian Exporters
When US tariffs on India reached 50 percent, an interim trade agreement was recently reached between India and the US, under which the tariff was reduced to 18 percent. The 25 percent punitive duty was removed during this period. Consequently, following the court's decision and Trump's new announcement, only an additional 10 percent duty will be imposed on Indian goods in the US.
Now, understand how this 10 percent duty will be imposed?
This can be understood as a 10 percent duty being imposed on top of the existing import duty (MFN duty). For example, if a product already has a five percent duty, a ten percent additional duty will now be added, resulting in a total of 15 percent. Previously, this duty was 5 percent plus 25 percent, or 30 percent.
What Experts Say: Also, Understand
Reactions are emerging from around the world to Trump's tariff game. In such a situation, Ajay Sahai, Director General of the Federation of Indian Export Organizations (FIEO), stated that Indian exporters will now receive relief as the tariff has been reduced to 10 percent. Meanwhile, Ajay Srivastava, founder of the think tank Global Trade Research Initiative (GTRI), suggested that India should re-evaluate the interim trade agreement with the United States.
However, according to Ajay Srivastava, this 10 percent tariff will now apply to only 55 percent of Indian exports. Approximately 40 percent of goods are already exempt. However, sectoral tariffs of 50 percent on steel, aluminum, and copper, and 25 percent on some auto parts, will remain in place.
Trump's stance after the Supreme Court's decision
Following the Supreme Court's decision on tariffs, President Trump stated that there has been no change in the trade agreement with India and that the agreement will continue. It should be noted that earlier, when the two countries announced the framework of an interim trade agreement, Trump issued an executive order removing the 25 percent additional tariff imposed on the purchase of Russian oil. He stated that India had pledged to stop directly or indirectly importing energy from Russia and to purchase American energy products.
Now, understand the state of India-US trade.
It is noteworthy that between 2021 and 2025, the United States will be India's largest trading partner. Its share in India's total exports is approximately 18 percent, its share in imports is 6.22 percent, and its share in total bilateral trade is 10.73 percent. Furthermore, in the fiscal year 2024-25, total trade between India and the United States will reach $186 billion. This includes exports of $86.5 billion and imports of $45.3 billion.
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