India has responded cautiously to a landmark US Supreme Court ruling that deemed President Donald Trump's sweeping tariffs illegal.

The Commerce Ministry stated that it has noted the judgement delivered on Friday, along with remarks from Trump during a subsequent press conference. Officials emphasised that they are closely studying all developments to assess potential implications for bilateral trade.

The conservative-majority Supreme Court ruled six to three that a 1977 law, upon which Trump had relied, does not authorise the President to impose such tariffs unilaterally. This decision upends a key pillar of Trump's economic policy, which involved sudden levies on individual countries and disrupted global trade patterns.

Trump reacted with fury to the verdict, despite having nominated two of the justices involved. He alleged, without evidence, that the court was swayed by foreign interests. "I'm ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what's right for our country," he told reporters.

Undeterred, Trump vowed that tariffs would return in force. He claimed the ruling actually enhances presidential power, stating: "In order to protect our country, a president can actually charge more tariffs than I was charging in the past." This suggests a pivot to alternative legal mechanisms.

Treasury Secretary Scott Bessent reinforced this stance during a speech at the Economic Club of Dallas. He indicated that new methods would ensure "virtually unchanged tariff revenue in 2026," signalling continuity in protectionist measures despite the judicial setback.

The administration has now invoked Section 122 of the Trade Act of 1974. This provision allows the President to impose temporary tariffs of up to 15 per cent for a maximum of 150 days. It targets "large and serious" US balance-of-payments deficits, where imports vastly outpace exports.

For India, the immediate outcome is a reduced tariff rate of 10 per cent on its exports to the US, down from the previous 18 per cent. This adjustment follows Trump's new global levy, implemented swiftly after the Supreme Court ruling.

Trump announced the new order via social media, describing it as "effective almost immediately." A White House factsheet confirms the duties will commence on 24 February and last for 150 days. Exemptions apply to sectors under separate investigations, such as pharmaceuticals, and goods entering under the US-Mexico-Canada Agreement.

This development delivers mixed relief for Indian exporters. While the lower 10 per cent rate eases some pressure, the temporary nature of the measure introduces uncertainty. Industries reliant on the US market, including textiles, electronics, and auto components, must now recalibrate strategies.

India's Commerce Ministry has adopted a watchful approach, avoiding hasty countermeasures. "Some steps have been announced by the US administration. We are studying all these developments for their implications," the statement noted. This measured tone reflects New Delhi's preference for dialogue amid ongoing trade negotiations.

The ruling exposes vulnerabilities in Trump's tariff strategy, rooted in expansive interpretations of outdated laws. The 1977 statute was originally designed for narrow economic emergencies, not broad protectionism. Legal experts anticipate further challenges, potentially prolonging the saga.

Trump's shift to Section 122 underscores creative legal manoeuvring. However, its 150-day limit and 15 per cent cap constrain the scale of previous impositions. Bessent's revenue projections suggest the administration views this as a viable bridge to longer-term policies, possibly via congressional action or new legislation.

For India-US trade relations, timing is critical. Bilateral commerce exceeded $190 billion last year, with India enjoying a surplus. Reduced tariffs could bolster Indian competitiveness, yet prolonged uncertainty risks supply chain disruptions and investor caution.

Pharmaceuticals, a cornerstone of Indian exports to the US valued at over $10 billion annually, remain shielded for now. This exemption aligns with ongoing probes, preserving a vital sector amid the flux.

Broader geopolitical ramifications loom. Trump's rhetoric on foreign influences may strain ties with allies, including India, which has deepened strategic partnerships via the Quad and defence pacts. New Delhi will likely monitor how this plays into Trump's "America First" agenda.

Indian policymakers face a delicate balance. Retaliatory tariffs could escalate tensions, while accommodation might invite further US demands on issues like intellectual property and market access. Diplomatic channels, including the Trade Policy Forum, offer avenues for resolution.

Exporters are already adapting. Chambers of commerce urge diversification into markets like the EU and ASEAN to mitigate US exposure. The rupee's volatility against the dollar adds another layer of complexity.

As the 150-day window unfolds, India must prepare for multiple scenarios. A renewal of tariffs post-24 June could revert pressures, while a negotiated settlement might yield concessions. The Commerce Ministry's ongoing analysis will inform cabinet-level decisions.

This episode highlights the interplay of judiciary, executive power, and international commerce. For India, it presents both risks and opportunities in navigating an unpredictable US trade landscape under Trump.

PTI