SCOTUS Strikes Down Trump Tariffs: Deal or No Deal for India?

On February 20, 2026, the US Supreme Court delivered what may be the most consequential economic ruling of the decade. In a 6-3 decision, Chief Justice John Roberts wrote that President Trump had overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) — a 1977 law designed for genuine national emergencies — to impose sweeping tariffs on goods from nearly every country on Earth.

Roberts was blunt: "It is telling that in IEEPA's half century of existence, no President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope." The court ruled that IEEPA, which allows the president to "regulate importation" during emergencies, was never intended to give the executive branch the power to levy taxes — something the Constitution reserves for Congress.

Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented, arguing the law's language was broad enough to encompass tariffs. But the 6-3 majority was decisive: the IEEPA tariff weapon is dead. Permanently.

For India, the tariff saga has been nothing short of a geopolitical rollercoaster. What started as "reciprocal trade" quickly became entangled with Russian oil, defence purchases, and a high-stakes bilateral trade deal. Here's how it unfolded:

This is where it gets interesting for India. The February 2 trade deal was essentially a transaction: India makes concessions, Trump lowers tariffs. Here's what India was supposed to give up:

The Global Trade Research Initiative (GTRI) immediately recommended that India review the entire trade deal. Their logic is simple: the two biggest concessions India was making — stopping Russian oil and committing to buy American — were in exchange for tariff relief that the Supreme Court has now delivered for free.

As GTRI puts it: the removal of reciprocal tariffs frees about 55% of India's exports to the US from the 18% duty, leaving them subject only to standard Most Favoured Nation (MFN) tariffs under global trade rules.

Perhaps the most fascinating subplot in this saga is India's masterclass in strategic ambiguity on Russian oil.

Here are the facts: Trump announced on February 2 that Modi had "committed" to stop buying Russian oil and replace it with American and Venezuelan crude. He posted on social media that Modi agreed to "BUY AMERICAN, at a much higher level."

But here's what actually happened:

Modi's post on X welcomed the reduced tariffs but did not mention Russian oil. The official US-India joint statement also did not mention Russian oil. And on February 20 — the same day as the SCOTUS ruling — India's Ambassador to Russia, Vinay Kumar, confirmed that India will continue buying Russian oil.

The numbers tell the story: India's Russian oil imports have been declining naturally — from a peak of 1.5 million barrels per day down to roughly 1.2 million in January, with projections of 800,000 barrels per day by March. This gives India plausible cover to claim partial compliance without ever having explicitly agreed to anything.

As Chatham House noted: despite the reset in India-US relations, New Delhi retains its commitment to strategic hedging. Translation: India keeps all its options open.

Trump called the ruling "a disgrace" and immediately declared he has a "backup plan." Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick had reportedly prepared contingency plans before the ruling even came down. So is this really game over?

The short answer: no. Trump has at least five legal pathways to reimpose tariffs. But every single one is slower, more limited, and more legally vulnerable than the IEEPA route the Supreme Court just killed.

The fastest option is Section 122, which lets the president impose tariffs to address trade deficits — but with two critical limits: rates are capped at 15% and they expire after 150 days. Compare that to the 50% India was facing under IEEPA. It's a band-aid, not a replacement.

Section 338 of the Tariff Act of 1930 allows tariffs up to 50% based on trade discrimination, but here's the catch: it has never been used in history. If Trump invokes it, legal challenges are virtually guaranteed — and after today's ruling, courts will scrutinise executive tariff authority more aggressively than ever.

Both of these statutes give the president broad tariff powers, but they require formal investigations first. Section 232 needs a Commerce Department probe that takes up to 270 days. Section 301 requires the US Trade Representative to conduct a fact-finding investigation proving unfair trade practices. Neither can be invoked overnight.

Congress has the constitutional authority to impose tariffs — that's exactly what the Supreme Court reaffirmed today. But the Republican caucus is deeply divided on tariffs. A small group of House Republicans recently joined Democrats to overturn Trump's 35% tariff on Canada. Senate support for broad tariffs is even weaker. Speaker Mike Johnson said Congress would "determine the best path forward in the coming weeks" — but actually passing legislation is a different story.

India-US trade has been on a remarkable upward trajectory despite the tariff chaos. Here's where things stand:

India's negotiation team is reportedly heading to Washington this weekend to finalise the trade deal text. The SCOTUS ruling changes their brief dramatically. Here's what trade experts recommend:

1. Renegotiate from strength, not desperation. The February 2 deal was struck when India was under 50% tariff pressure. That pressure is now gone. India should reassess which concessions are still worth making and which were purely tariff-driven.

2. Don't walk away entirely. Despite the tariff relief, India still faces 50% duties on steel and aluminium under Section 232. A constructive engagement with the US can address these and prevent new tariff actions under other statutes.

3. Keep the Russian oil ambiguity. India never explicitly committed to stopping Russian oil purchases, and the tariff penalty for it has been voided. Natural market forces are already reducing imports. India can maintain its strategic relationships with both the US and Russia without making binding promises.

4. Push for Section 232 relief. With the IEEPA tariffs gone, the biggest trade barrier for India is the 50% steel and aluminium tariff. India should make this a priority in negotiations — especially since these tariffs hurt American manufacturers too by raising input costs.

5. Prepare for Plan B. Trump's administration has already invoked Section 122 for a 10% global tariff and made clear they will try to reimpose tariffs through other legal channels. India should prepare for the possibility of Section 301 or Section 232 investigations targeting Indian trade practices. Building goodwill through selective market-opening measures is sound strategy.