Trump Tariffs Shock: What 15% Hike Means for India’s Trade Future

The US Supreme Court struck down Trump’s tariffs, removing an 18% duty on 55% of India’s exports and boosting key sectors. But a new 15% tariff has renewed uncertainty for trade.

India’s trade outlook with the United States has entered a phase of both relief and renewed uncertainty after a dramatic sequence of developments involving US President Donald Trump’s tariff policies. The US Supreme Court’s decision to strike down sweeping “reciprocal tariffs” imposed under emergency powers has provided a significant, though possibly temporary, boost to Indian exports. At the same time, Trump’s quick move to impose fresh tariffs—now raised to 15%—has complicated the situation, creating a mixed economic scenario for India.

What It Means for India

The court ruling is particularly significant for Indian exporters because it effectively removes duties that had impacted a large portion of shipments to the US. Around 55% of India’s exports to America are now freed from an earlier 18% tariff, reverting to standard trade norms under Most Favoured Nation (MFN) rules. This shift is expected to improve competitiveness for key sectors such as textiles, engineering goods, pharmaceuticals, and gems and jewellery—industries that are heavily dependent on the US market.

For months, these sectors had been under pressure due to steep tariff hikes, with some duties reaching as high as 50%, causing a noticeable drop in exports and raising concerns over job losses and declining competitiveness. The removal of certain tariffs now offers breathing space, allowing exporters to regain market share and stabilise operations. Additionally, the ruling reduces the risk of sudden, unilateral tariff shocks by limiting the US president’s ability to impose sweeping duties without legislative backing.

However, the relief is tempered by Trump’s immediate policy response. By invoking alternative legal provisions, his administration introduced a new baseline tariff—initially 10% and later increased to 15%—on imports from multiple countries, including India. While this is lower than earlier peak rates, it still raises costs for exporters and injects uncertainty into trade planning.

For India, the implications are nuanced. On one hand, lower tariffs compared to previous highs could make Indian goods more competitive again in the US market. On the other, the unpredictability of US trade policy continues to pose challenges for businesses reliant on stable export conditions. Industries such as steel and auto components remain vulnerable, as separate sector-specific tariffs continue to apply.

The developments also have broader implications for India-US trade negotiations. With the Supreme Court reinforcing legal limits on executive power, future tariff decisions are expected to follow more structured, institutional processes. This could benefit India by enabling clearer timelines and more predictable negotiation frameworks. At the same time, analysts warn that the erosion of tariff leverage may alter the dynamics of ongoing trade talks, requiring both sides to recalibrate their strategies.

Ultimately, while the court ruling offers immediate relief to Indian exporters, the reintroduction of tariffs under a different framework highlights the continuing volatility in global trade. For India, the path ahead will depend on how effectively it navigates this uncertainty, diversifies export markets, and secures favourable trade agreements in an increasingly protectionist global environment.