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February was a busy month for India-US trade relations. The two countries announced an imminent interim trade deal, the US Supreme Court struck down President Donald Trump’s tariffs, India’s negotiating team postponed a visit to Washington indefinitely and Commerce Secretary Piyush Goyal hosted US Commerce Secretary Howard Lutnick in Delhi. All of this begs the question: what will happen to the trade deal and US tariffs?
EXPLAINED | How is the US-India trade agreement regulated?
What did the US Supreme Court say?
Mr. Trump imposed most of his tariffs on other countries, including India, using the International Emergency Economic Powers Act of 1977. On February 20, the US Supreme Court struck down tariffs imposed under that law. It said the US president would need congressional approval before imposing tariffs under those laws. For most countries, this meant the removal of “reciprocal tariffs” that Mr. Trump had imposed on them from mid-2025. On February 6, Mr. Trump lifted the 25% punitive tariffs he had imposed on India for imports of Russian oil. This reduced India’s overall tariff from 50% to 25%. According to a joint statement by the two countries, the remaining 25% reciprocal duties would be reduced to 18% under the interim agreement. But before the US could do that, its Supreme Court overturned the tariffs.
Also read | US slaps 126% tariff on Indian solar imports
What was the Trump administration’s response?
Mr. Trump has lashed out at the Supreme Court in several social media posts and speeches. As expected, he also resorted to other laws that allowed him to impose tariffs on other countries. From now on, it is a flat 10% tariff on all imports for 150 days starting January 24th. However, Mr Trump said he would raise this to the maximum allowable limit of 15%. That hasn’t happened yet. Several other tariffs that the U.S. imposed in the last year or so remain in place. These include a 50% tariff on aluminum and steel imports and country-specific tariffs on items worth less than $800. Both continue to affect India, as steel and aluminum form a substantial part of India’s exports to the US, and Indian MSMEs have used e-commerce platforms and benefited from duty exemptions on items below $800.
The US on February 24 imposed a 126% tariff on solar module imports from India after a “preliminary” finding that subsidized exports from India were hurting US solar firms.
Also read | The new US tariffs will go into effect after the Supreme Court’s decision
What about the impact on other trade agreements?
The European Union, which has already signed a trade deal with the US, has been very vocal about what it expects after the Supreme Court ruling. “The European Commission requests full clarification on the steps the US intends to take following the recent Supreme Court ruling on the International Emergency Economic Powers Act (IEEPA),” the Commission said in a statement. “The current situation is not conducive to delivering ‘fair, balanced and mutually beneficial’ transatlantic trade and investment, as agreed by both sides and outlined in the August 2025 EU-US Joint Statement. Japanese officials have also been vocal about the deal, saying that since Japan’s deal with the US focused on auto tariffs, which were not affected by the Supreme Court ruling, they did not want to revisit the deal.
Australia’s trade minister said the US must uphold the free trade agreement signed between the two countries and allow Australian goods to be imported duty-free into the US because Australia is holding up its end by allowing duty-free imports of American goods.
Also read | India-US trade deal will destroy Indian farmers: Rahul Gandhi
How did India respond?
In various interviews and press conferences, Mr. Goyal said the interim agreement is expected to be formally signed by mid-March and could be implemented by early April. However, these statements were made before the decision of the Supreme Court. In response to the ruling, the Ministry of Trade and Industry issued a rather unequivocal statement compared to the statements of other countries and groups. “Yesterday, we noted the U.S. Supreme Court ruling on tariffs,” the statement said, adding, “President Trump also addressed a press conference in this regard. The U.S. administration has announced some actions. We are studying all of these changes for their implications.”
The Indian team was scheduled to be in Washington from February 23 to 25 to finalize the outlines of the interim agreement so that it could be signed in mid-March. While the agreement was not mentioned in an official statement, sources in India’s Ministry of Commerce and Industry said that “both sides are of the view that the proposed visit of India’s chief negotiator and team will be scheduled after each side has had time to assess the latest developments and their implications.” In other words, the US visit has been postponed indefinitely. On the other hand, however, Mr. Goyal hosted both Mr. Lutnick and US Ambassador to India Sergio Gore in New Delhi on February 26 for a meeting that Mr. Goyal said proved “fruitful.” The new date of the official meeting of the negotiators has not yet been announced.
At this point, the deal is more important to the US than to India, as India can reduce its tariffs on US goods only after signing the deal. At the same time, the threat of US tariffs, which had been looming over issues such as Russian oil and the purchase of other US goods, was removed for the time being.
Also read | India focused on getting the best trade deal with the US, says Piyush Goyal
Has the US changed its stance?
On trade deals, the Trump administration has been clear: nothing is changing. Mr Trump has warned countries he has signed deals with to respect them and not “play games” or risk higher tariffs. “Any country that wants to ‘play games’ with the Supreme Court’s ridiculous decision, especially those that have ‘cheated’ the US for years and even decades, will face a much higher tariff and worse than what they recently agreed to (sic),” he said in a post on Truth Social. He followed up with, “As president, I don’t have to go back to Congress to get approval for tariffs. It was already won in many forms long ago! It was also just reaffirmed by a ridiculous and ill-conceived Supreme Court decision!”
Mr. Lutnick also said that nothing has changed from the U.S. perspective and that he expects other countries to live up to their commitments. “I’ve been telling them (U.S. trading partners) for a year, if we win or lose, we’re going to have tariffs,” Lutnick said in a televised interview. “The president’s policies should have continued. That’s why they signed these deals even though the litigation was going on … We want them to understand that these deals are going to be good deals. We expect to stand by them. We expect our partners to stand by them.”
Published – 01 March 2026 02:00 IST
