US Supreme Court ruling weakens Trump’s leverage in India trade negotiations
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The US Supreme Court’s decision to strike down President Donald Trump’s emergency tariffs has provided India with significant new leverage in ongoing trade negotiations.
In a 6–3 ruling on February 20, 2026, the Court held that the use of the International Emergency Economic Powers Act to unilaterally impose broad "Liberation Day" tariffs was unconstitutional. This ruling effectively voids the 50% punitive duties previously imposed on Indian goods, which had been applied in part due to India’s purchases of Russian oil.
Earlier this month, New Delhi and Washington reached a framework for an interim trade deal. Under that agreement, the US was to lower tariffs on Indian goods to 18% in exchange for India purchasing $500 billion in American energy and technology over five years and halting Russian oil imports.
However, the Supreme Court ruling has reset the default tariff landscape, leading Indian negotiators to postpone a visit to Washington to reassess their position.
While President Trump quickly responded by invoking Section 122 of the Trade Act of 1974 to propose a new 15% global tariff, economists note this authority is more legally constrained and temporary.
Analysts suggest India may now seek more favourable terms, as the immediate threat of 50% duties has been removed.
Despite the shift, Indian officials indicated they do not intend to scrap the deal entirely, as a formal agreement offers long-term certainty against future executive actions.
The deal remains a point of domestic contention within India.
The Samyukt Kisan Morcha and other farmer groups have scheduled meetings to protest the pact, labelling it a surrender of agricultural sovereignty.
As the Ministry of Commerce reviews the situation, India is expected to push for new safeguards in the final agreement to protect against the volatility of US trade policy and potential future legal challenges.