India’s proposed trade deal with the US is still a framework where no commitments are legally bound, sources told ET. Friday’s court order has put the basis through which Trump initiated tariff-based negotiations under a question mark, they noted.
ALSO READ: Trump announces 10% global tariff on top of existing duties after Supreme Court setback
The order makes it clear that reciprocal tariff stands invalid. India will now await the White House’s response to this order before entering into a formal agreement, sources said. Presently India is working on a 25% tariff, after Trump removed the 25% tariff imposed on account of Russian oil imports.
In a 6-3 decision, the US Supreme Court struck down Trump’s global reciprocal tariffs enacted under a federal law intended for national emergencies. Chief Justice John Roberts stated that while the International Emergency Economic Powers Act allows the US president to respond to foreign threats, it does not grant a “blank check” to impose indefinite, across-the-board taxes.
ALSO READ: India-US trade deal unchanged, New Delhi still pays tariffs, Trump says
Refund Process
The US may now be forced to refund upwards of $175 billion collected globally under the IEEPA authority — a portion of which would return to Indian exporters in the textile, chemical, and engineering sectors.The tariffs were challenged by businesses affected by the duties and 12 US states — most of them governed by the Democrats — after lower courts found that Trump had exceeded the powers granted to him under the International Emergency Economic Powers Act (IEEPA).
Meanwhile, Trump has called the decision a “disgrace” and signalling that his administration is preparing a “backup plan.”
Treasury secretary Scott Bessent had last year said Washington had “multiple fallback options” if courts controlled the use of emergency powers.
The Trump administration could also seek congressional authorisation for broader tariff powers. India is studying these issues.