How India’s patience outlasted Trump’s tariff blitz
After the U.S. Supreme Court struck down Donald Trump’s tariffs, India’s decision not to rush a trade deal with Washington now looks strategically astute
By Sanjay Dubey
In a landmark decision that has sent shockwaves from the White House to New Delhi, the United States Supreme Court ruled on February 20, 2026, that President Donald Trump lacked the legal authority to unilaterally impose sweeping global tariffs under the International Emergency Economic Powers Act (IEEPA). For India, which had been pushed to the brink of a trade war with effective tariffs as high as 50%, the ruling is more than a legal victory—it is a validation of New Delhi’s strategic patience.
As other nations like Japan, Vietnam, the UK, and the EU rushed to sign trade deals under the shadow of “Liberation Day” threats, India stood its ground. Now, with the legal floor of Trump’s trade policy falling through, the “almost ready” India-US trade deal is in a state of flux. The question for New Delhi is no longer how to mitigate a 50% tariff, but why it should settle for 18% when the legal basis for those threats has been declared invalid.
The 50 percent pressure cooker
The trade friction began on what President Trump dubbed “Liberation Day”—April 2, 2025—when he announced a 26% “reciprocal tariff” on Indian imports, later adjusted to 25%, citing a national emergency over trade deficits. By August 2025, the pressure intensified. Citing India’s continued imports of Russian oil, the administration slapped an additional 25% “punitive duty” on Indian goods, bringing the effective tariff to a staggering 50%.
This “double-whammy” forced India into a corner. For months, Indian negotiators faced a binary choice: accept a permanent, albeit lower, tariff regime or watch their export competitiveness evaporate. Under this duress, a breakthrough was announced on February 2, 2026. According to U.S. officials, in exchange for India committing to stop Russian oil imports and purchasing $500 billion in U.S. energy, technology, and defense products, the U.S. agreed to roll back tariffs from 50% to an “interim” rate of 18%.
While Indian officials acknowledged the trade deal and welcomed the tariff cuts, they did not officially accept the American version of its commitments to purchase these products or completely halt Russian oil imports. The 25% punitive duty related to Russian oil was removed after this announcement by an Executive Order on February 7, 2026. This left only the 25% “reciprocal” tariff in place—until the Supreme Court struck it down.
The Supreme Court ruled 6–3 that IEEPA does not grant the President the power to “adjust imports” through taxes or tariffs. The Court emphasized that the power to tax—which includes tariffs—belongs exclusively to Congress under Article I, Section 8 of the Constitution. By applying the “major questions doctrine,” the Court argued that such a massive shift in economic authority requires clear congressional authorization, which IEEPA lacks.
The ruling effectively invalidates the very foundation of the “Liberation Day” tariffs. Because the reciprocal tariffs were levied under IEEPA authority, they are now legally void.
The gamble that paid off
While the EU, Japan, and Taiwan signed trade agreements in 2025 to secure “exemptions” from these tariffs, India’s refusal to rush into a trade deal with Washington now looks strategically astute. By holding out, India avoided locking itself into a deal signed under duress to escape a 50% threat that has now vanished.
Had India signed the deal, it might have been legally bound by treaty or executive agreement to the 18% rate, even after the underlying IEEPA tariffs were struck down. By delaying and remaining in the “almost ready” phase, India preserved its leverage. The country no longer needs to negotiate to escape a 50% penalty; it can now negotiate from a much better position.
Despite the ruling, President Trump remains defiant, stating that “The India deal is on.” However, the reality on the ground has shifted. When it was announced, the 18% tariff seemed like “relief.” In a post-ruling world, it looks like an unnecessary burden. If the 25% reciprocal tariff is illegal, India’s exports should technically face the much lower standard Most Favored Nation (MFN) rates.
Trump has attempted to bypass the Supreme Court ruling by announcing a new 10% global tariff under Section 122 of the 1974 Trade Act, which allows temporary tariffs of up to 15% for 150 days. The immediate threat has thus fallen from 50% to 10%, weakening Washington’s leverage. The administration could also pivot to Section 232 of the 1962 Trade Expansion Act, or use other tools such as Sections 201 or 301 of the 1974 Trade Act. But all require formal investigations and findings, making them far more cumbersome. These procedural hurdles give New Delhi months of breathing room to negotiate from a position of strength.
Even if the Trump administration seeks explicit Congressional authorization to restore presidential tariff authority, it is unlikely lawmakers would delegate powers as sweeping, flexible, and rapidly deployable as those previously claimed under IEEPA.
The fate of the ‘almost ready’ deal
The “almost ready” deal seems to be back on the drawing board. India will now likely adopt its time-tested policy of “wait and watch.” If the temporary tariff is the only legal weapon Trump has left, India might push for its 18% “agreed” rate to be slashed significantly. Furthermore, India could raise the issue of refund claims for exporters who paid duties under a regime now declared unlawful. This adds another layer to India’s changed position.
Regarding the insistence on halting Russian oil imports, that pressure was built on the threat of a 50% tariff. With that threat gone, New Delhi can re-examine its energy strategy, balancing its national interest against a weakened Washington.
Much will depend on how the Trump administration, U.S. Congress and Modi administration respond in the coming weeks. But for now, the collapse of emergency tariff authority has altered the negotiating landscape — and India appears better positioned than it did a few days ago. It might not have to choose now between the “Bad” (18%) and the “Worse” (50%), but between the “Pre-2025 Status Quo” and a fair partnership.