A day of dramatic legal and political manoeuvres in Washington D.C. has sent ripples of uncertainty across the globe, landing directly on the desks of Indian exporters. In a landmark decision, the US Supreme Court struck down the Trump administration's broad authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). However, any relief for Indian businesses was short-lived, as President Donald Trump immediately retaliated by announcing a new 10% global tariff under a different law. Amid this turmoil, the White House has asserted that the recently negotiated interim trade deal with India remains unchanged, leaving Indian industry in a state of anxious confusion.

A Legal Rebuke and a Swift Retaliation

The saga began when the Supreme Court, in a 6-3 ruling, determined that the administration had exceeded its legal authority by using the 1977 IEEPA to enact sweeping, broad-based import tariffs. This decision was hailed by free-trade proponents as a crucial check on executive power and opened the possibility of importers claiming refunds on billions of dollars in duties paid. For months, Indian exporters had grappled with punitive tariffs that had reached as high as 50%, severely impacting competitiveness.

However, the window of optimism slammed shut almost immediately. Terming the court's decision “terrible” and “deeply disappointing,” President Trump announced he would sign an executive order for a 10% global tariff, this time invoking Section 122 of the Trade Act of 1974. This provision allows for a temporary import surcharge, for up to 150 days, to address a nation's balance-of-payments deficits. A White House official confirmed the new 10% tariff would be effective immediately, leaving no doubt about the administration's unwavering protectionist stance.

The India-US Deal: An Anchor in the Storm?

The most pressing question for Indian commerce is the status of the hard-won interim trade agreement announced on February 2, 2026. That deal was a significant breakthrough, reducing the punitive 50% tariff rate on Indian goods to 18%. In return, India agreed to eliminate its tariffs on a range of US goods and expressed its intention to purchase over $500 billion in American energy, technology, and other products.

In the hours following the Supreme Court ruling, President Trump was unequivocal. When asked about the impact on the India pact, he stated, “Nothing changes. They'll be paying tariffs, and we will not be paying tariffs... We made a deal with India. A fair deal now.” This sentiment was echoed by officials, who confirmed the 18% tariff for India, negotiated as part of the bilateral agreement, would stand.

This confirmation, however, has not entirely cleared the air. The critical ambiguity lies in whether the new 10% global tariff will be applied on top of the 18% negotiated rate. A White House official's comment that India will have to pay the 10% tariff “until another authority is invoked” suggests this could be the case, potentially raising the effective tariff rate to 28%. This lack of clarity poses a significant challenge for exporters, who need predictability to price contracts and manage supply chains.

Exporters on Edge, Awaiting Clarity

The reaction from India's export community has been one of extreme caution. Industry bodies, from textiles to gems and jewellery, have indicated they are in a wait-and-watch mode, hoping for a clearer picture to emerge in the coming week. Pawan Kumar G, president of the Seafood Exporters' Association of India, summed up the mood, stating, “The US Supreme Court ruling about the tariffs is good news for us. However, we have no idea how it is going to impact our exports till we get to know the details.”

This development comes at a time when the Indian government is actively trying to boost exports, particularly from the MSME sector. Just a day prior, on February 20, the Ministry of Commerce announced seven additional measures under its Export Promotion Mission to help small enterprises compete globally. These initiatives aim to address structural issues like access to finance and logistics disadvantages. Furthermore, the government has been celebrating the prospect of multiple Free Trade Agreements (FTAs) with partners like the UK, Oman, and the European Union becoming operational soon, which Commerce Minister Piyush Goyal noted gives India access to nearly 70% of the global GDP.

Despite these positive steps, the US remains India's top export destination, making any policy shift in Washington a matter of critical importance. The latest trade data for January 2026 had already shown a widening merchandise trade deficit of $34.7 billion, driven by a surge in imports. While merchandise exports showed double-digit growth in the first half of February, the uncertainty emanating from the US could threaten this momentum.

The Path Forward: Navigating a Turbulent Landscape

For now, the survival of the India-US interim trade deal provides a fragile floor in a volatile environment. The 18% tariff, while high, is a significant improvement over the 50% rate faced previously and offers a pricing advantage over competitors like Vietnam (20% tariff). Yet, the imposition of a new, legally distinct 10% global tariff threatens to erode that advantage and plunges exporters back into a state of flux. The coming days will be critical. Indian trade representatives will undoubtedly be seeking urgent clarification from their US counterparts. Businesses, meanwhile, must navigate this uncertainty, factoring in potential new costs while hoping the foundation of the recent bilateral agreement holds firm against the storm of US domestic politics.