India-U.S. Trade Deal: February was marked by significant developments in India-U.S. trade relations. The two nations announced an impending interim trade agreement, while the U.S. Supreme Court overturned tariffs imposed by President Donald Trump. This led to the indefinite postponement of the Indian negotiation team’s visit to Washington. Meanwhile, Indian Commerce Minister Piyush Goyal hosted U.S. Commerce Secretary Howard Lutnick in New Delhi.
The Supreme Court’s February 20 ruling struck down tariffs implemented under the International Emergency Economic Powers Act of 1977, requiring congressional approval for such tariffs. This decision impacted the reciprocal tariffs imposed by Trump, which had been reduced from 50% to 25% on Indian goods. The interim agreement aimed to further reduce these tariffs to 18%, but the court’s decision halted this process.
Despite the ruling, Trump announced a flat 10% tariff on all imports for 150 days starting January 24, with plans to increase it to 15%. This affects India’s exports of steel and aluminium, which face a 50% tariff, alongside newly imposed 126% tariffs on Indian solar modules.
The European Union and Japan have expressed concern over the ruling’s implications on their trade deals with the U.S. Meanwhile, Australia’s trade minister has urged the U.S. to honor their free trade agreement. Indian sources indicate that the negotiation team’s visit to the U.S. will be rescheduled after evaluating these developments.
Commerce Minister Goyal’s recent meeting with Lutnick and U.S. Ambassador Sergio Gor in New Delhi was described as fruitful. However, the need for a formal trade deal remains pressing for the U.S., as India’s tariff reductions are contingent upon it. With Trump’s administration insisting on the validity of existing deals, future negotiations will be closely watched.
Published in SouthAsianDesk, March 1st, 2026
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