NEW DELHI: In a landmark judgment with significant implications for India’s trade outlook, the Supreme Court of the United States has ruled that President Donald Trump acted beyond his legal authority in imposing sweeping global tariffs under emergency powers.
In a six-three decision authored by Chief Justice John Roberts, the court held that the use of the International Emergency Economic Powers Act (IEEPA) to introduce broad-based tariffs lacked clear congressional authorization.
"The president asserts the extraordinary power to unilaterally impose tariffs of unlimited amount, duration, and scope," Roberts wrote, adding that such authority must be explicitly granted by Congress.
The court, however, stopped short of clarifying the fate of more than $130 billion already collected under the now-invalidated tariffs. For India, the ruling provides immediate and tangible relief.
New Delhi had been hit with a 26 per cent "reciprocal" tariff , later revised to 25 per cent , announced in April 2025 as part of Trump’s "Liberation Day" trade measures. Then it was brought down to 18 per cent under a bilateral trade understanding along with the scrapping of 25 per cent penalty on importing Russian oil.
These tariffs applied to a wide range of Indian exports to the US, raising concerns across sectors from engineering goods to textiles and pharmaceuticals. With the court striking down IEEPA-based reciprocal tariffs, duties on most affected Indian exports effectively drop to zero for now.
The judgment also invalidates a separate 25 per cent levy imposed on certain imports from countries including China, Canada and Mexico over fentanyl-related concerns. However, tariffs on steel and aluminium imposed under different legal provisions remain in force.
Though there was no formal reaction from India, people familiar with the matter said ruling ideally curbs Washington's ability to use "sweeping emergency powers as a universal enforcement tool."
While the administration may attempt to reimpose tariffs under Sections 301 or 232 of US trade law, those mechanisms require fresh investigations and public justification, delaying any immediate action and opening the door to further legal scrutiny.
"But lets first and see the detailed formal response from the US administration," said a person.
This will also make the recently concluded US deals one-sided.