The US Supreme Court ruled down Trump's IEEPA tariffs in February 2026, eliminating reciprocal tariffs; however, the steel and aluminum Section 232 tariffs and de minimis suspension still affect Indian exports. India's tariff is reduced from 18% to 10% with the implementation of a new worldwide tariff on February 24. detailed analysis of the impact of trade.
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| Trade experts have said that striking down of Trump tariff will result in countries that already have trade deals with the U.S. to re-examine them, and also called for India to do the same regarding its Interim Agreement that is yet to be signed. | Photo Credit: Getty Images/iStockphoto |
After the U.S. Supreme Court's shocking decision on February 20, 2026, Indian exporters are receiving a mixed load today: significant relief for some, constant troubles for others. President Donald Trump's broad "reciprocal" tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were declared unconstitutional by the Court in an unmistakable 6-3 opinion, which held that they went beyond presidential power. Chief Justice John Roberts wrote clearly for the majority that Congress, not the White House, has the authority to impose taxes and set tariffs under the Constitution.
These reciprocal tariffs are no longer in place, which had a significant negative impact on India with rates as high as 18% (down from an opening of 25% following a bilateral framework agreement). Refunds for importers who paid billions under these emergency tariffs may be coming soon, but the complicated procedure will be decided in lower courts. This is a huge success for many Indian industries that were hit with those additional taxes, such as textiles, leather goods, machinery, and home décor, as the burden of tariffs is lifted overnight.
However, hold off on breaking the flute of bubbly just yet. Other U.S. tariffs are still in effect and continue to hurt Indian exporters in a number of important industries. Export data and trade experts identify constant discomfort points:
• Steel and aluminum (Section 232 tariffs): The decision has no effect on these national security-based taxes, which were raised to 50% on the majority of international imports (with a few exceptions, such as the UK at 25%). Indian steel and aluminum shipments, which are essential for manufacturing, automobiles, and construction, are still subject to these high taxes, which drive up costs and reduce profit margins.
• De Minimis Suspension for Shipments with Low Value: The $800 de minimis exception, which prevented imports under $800 from entering duty-free, was already stopped by Trump. Small Indian exporters that sell directly to consumers through e-commerce platforms—think consumer products, clothing, spices, and handicrafts—now pay all applicable duties on each package. SMEs are more severely impacted by this, as the costs of compliance and logistics for shipments that were formerly hassle-free increase.
Despite the Court's restriction on the emergency powers, these remaining tariffs continue to put pressure on bilateral commerce by affecting both big players (steel mills, auto parts suppliers) and smaller ones (artisans and internet sellers).
Trump didn't hesitate to answer. Within hours following the decision, he announced—and signed—a new "temporary import tariff of 10% per value" under Section 122 of the 1974 Trade Act on almost all items imported into the United States, which would take effect on February 24, 2026, for a period of 150 days. This little used clause deals with balance-of-payments concerns and permits short-term charges of up to 15% without immediate congressional approval.
This new 10% global tax, in particular, results in a lower effective rate for India than the interim trade framework's invalidated 18%. According to White House comments, nations who have previously negotiated higher rates—such as the UK, Japan, India, and the EU—now have to pay this baseline 10% rate instead, but they are still required to uphold their concessions, such as India's pledges to buy American goods and import less Russian oil. Critical items including some minerals, energy products, pharmaceuticals, and agricultural products are exempt, but the majority of Indian exports are subject to the surcharge.
Maintaining that the India deal stays "on" with no significant issues, Trump presented it as a wise decision. "They’ll be paying tariffs, and we will not be paying tariffs," he emphasized. However, there is uncertainty because Section 122 is only in effect for a maximum of 150 days. Will it be extended by Congress? Will targeted duties be increased by fresh investigations under Section 232 or Section 301 (unfair practices)?
Indian officials are keeping a tight eye on everything. While exporters prepare for temporary modifications, the MEA and Commerce Ministry have indicated that they will reply formally. The decision allows for a little room on reciprocal penalties, but ongoing tariffs on essential industries serve as a reminder that the U.S. trade environment under Trump is still difficult.
Stay tuned for updates on refunds, sector-specific consequences, and any retaliatory actions from New Delhi as REAL BREAKING NEWS continues to investigate the repercussions.
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