America Supreme Court Traffic Ruling: Indian exporters are facing uncertainty due to continuous changes in the tariff regime regarding India’s trade relations with America. Recently, there has been a big fluctuation in American tariff rates, due to which exports from India to America are expected to be affected. in latest developments US Supreme Court After a decision of the Government of India, the effective tariff on Indian products has come down to ‘Most Favored Nation’ (MFN) level i.e. about 3 percent. In August the tariff had reached 50 percent. However, the relief may be temporary, as the President Donald Trump Has announced the implementation of a new global tariff of 10 percent, which may become effective soon.

The tariff dispute between India and America started in April, when America imposed 26 percent tariff on Indian goods. Later it was reduced to 10 percent. After this, in August, America had imposed a total tariff of up to 50 percent on Indian exports. This 50 percent tariff included 25 percent reciprocal tariff and 25 percent additional duty, which was linked to Russian oil imports by India. However, under an executive order issued on February 6, 2026, the additional 25 percent duty on oil imports from Russia was removed, reducing the effective tariff to 25 percent. According to the US government, India had agreed to a framework to stop direct or indirect oil imports from Russia, buy energy products from the US and increase defense cooperation over the next 10 years. On this basis the additional fee was abolished.

Proposed relief not fully implemented

Under the bilateral agreement signed between the two countries earlier this month, it was expected that the tariff would be reduced by 18 percent. This reduction was dependent on the implementation of the new executive order and the first phase of the trade agreement, but this process could not be fully implemented. Meanwhile, the US Supreme Court repealed the reciprocal tariff imposed under emergency provisions. With this decision, duties on Indian exports returned directly to the MFN level. Before the tariff increase, the average duty on India’s exports was about 3 percent.

What is Trump Tariff?
Trump tariffs are import duties imposed by America on goods coming from abroad. Their objective is to give competitive advantage to American companies and industries by making foreign products expensive. This policy is part of the ‘America First’ economic strategy.

Why did Donald Trump impose tariffs?
The main objectives of the tariff were said to be to reduce America’s trade deficit, strengthen the domestic manufacturing sector, improve the trade balance with foreign countries, especially China, and protect American jobs. The Trump government claimed that many countries were taking unfair trade benefits.

On which products were tariffs imposed?
The Trump administration imposed tariffs on several key goods, including steel and aluminum, electronics and machinery, solar panels and washing machines, and billions of dollars of goods imported from China. This affected the global supply chain and international trade.

What was the world’s reaction?
In response to Trump’s tariffs, many countries also imposed retaliatory tariffs on American products. China imposed tariffs on American agricultural products. European countries also targeted some American goods. This increased global trade tensions and created a situation of “trade war”. Instability was also seen in the international market.

What was the impact of Trump tariffs?
Some American industries got protection and many imported goods became expensive. As tensions in global trade relations increased, costs for consumers and companies increased.

New global tariff and possible impact

However, this relief is not likely to last long. President Trump has announced the implementation of 10 percent global tariff under Section 122 of the Trade Act, 1974. This tariff can remain in effect for a maximum of 150 days, unless the US Congress decides to extend it. Trump also indicated that an investigation under Section 301 is ongoing, based on which additional charges could be imposed. Currently, countries like China, Canada and Mexico already face tariffs under Section 301, although they also have exemptions in many areas of trade.

Challenges for Indian exporters

In the current situation, MFN duty of about 3 percent is applicable on most Indian exports, to which a temporary global tariff of 10 percent may also be added soon. However, sectors like mobile phones and pharma are likely to get tariff exemption, as zero tariff is already applicable on these and it can be retained in the new system also. Apart from this, special tariffs under Section 232 will continue on sectors like steel and automobile under separate provisions related to national security.

uncomfortable situation

Experts believe that America’s changing tariff policy may increase uncertainty in India-US trade relations. Indian exporters are finding it difficult to formulate strategies due to frequent policy changes. At present, everyone’s eye is on further negotiations towards finalizing the trade agreement between the two countries and creating a stable tariff structure.

(input: moneycontrol)



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