US Supreme Court Ruling Eases Tariff Uncertainty for India, Undermines Reciprocal Duty Framework

NEW DELHI– A ruling by the U.S. Supreme Court striking down most reciprocal tariffs imposed under emergency powers has brought significant legal clarity for India, sharply reducing uncertainty around U.S. trade duties and reinforcing limits on unilateral tariff actions, industry experts said Friday.

The decision effectively renders irrelevant the interim trade arrangement under which the United States had agreed to cap reciprocal tariffs on Indian goods at 18 percent, as any such levies would now require explicit congressional approval.

“Any attempt to levy these tariffs would require Congressional approval. This is likely to give much-needed relief and a competitive boost to Indian exporters, while also paving the way for potential refunds of tariffs collected without adequate legal basis,” said Manoj Mishra, Partner and Tax Controversy Management Leader at Grant Thornton Bharat.

Trade specialists cautioned, however, that the ruling does not eliminate all tariff risks. The United States is expected to continue relying on sector-specific duties imposed under Section 232 in strategic industries, making progress on a comprehensive bilateral trade agreement critical for ensuring long-term tariff certainty and stable market access for Indian exporters.

The court’s decision represents a major setback to President Donald Trump’s economic agenda. In a rare move, the conservative-led Supreme Court voted 6–3 to curb the president’s use of executive authority, ruling that he lacked the power under a 1977 emergency law to impose sweeping import tariffs on trading partners worldwide, including India.

Writing for the majority, Chief Justice John Roberts said the president’s claim amounted to an assertion of “extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope,” adding that such authority must be grounded in clear congressional authorization.

Roberts concluded that the 1977 statute cited by the administration “falls short” of providing the approval required by Congress, effectively invalidating the broad tariff regime imposed under its provisions.

The ruling is expected to have far-reaching implications for global trade flows and could prompt renewed negotiations between Washington and New Delhi aimed at establishing a more predictable and legally robust trade framework. (Source: IANS)