After the Supreme Court of the United States ruling and Trump's reaction, the proposed 18% reciprocal tariff on Indian goods may be replaced by a 15% rate instead of 25%.
The 15% levy announced by Donald Trump will be over and above existing MFN duties, raising effective import costs.
India is studying the implications; Commerce Minister Piyush Goyal said the bilateral trade deal may be signed in March and implemented in April.
India Tariff To Drop From 25% To 15% After US Ruling, Trade Deal Still On Course
India would see its current reciprocal tariff of 25 per cent reduced to 15 per cent instead of 18 per cent
Summary
With the US Supreme Court verdict, the proposed 18 per cent reciprocal tariff on Indian goods in the US market, announced earlier this month, may no longer be relevant.
Following the US Supreme Court's decision to invalidate the legal justification for the higher tariff, India would see its current reciprocal tariff of 25 per cent reduced to 15 per cent instead of 18 per cent, as agreed upon in a joint statement on February 7.
Trump increased the 10 per cent tax he had imposed less than 24 hours after the court ruling to 15 per cent on all trading partners on Saturday. Product-specific most-favored nation (MFN) rates, which are non-discriminatory tariffs imposed by a nation on imports from all WTO members, with the exception of countries with which it has preferential trade agreements, will be added to the 15 per cent tariff rate.
According to a news report, people said that the 15% plus MFN rate was the new normal following the ruling. The individuals emphasised the "spirit" of the joint statement, saying that a "mutually beneficial" agreement would "ideally" require Washington to either cut the 15% levy or MFN rates so that Indian goods remain competitive vis-à-vis China, Bangladesh, Vietnam, Cambodia, and Indonesia.
The commerce ministry, issued a statement on Saturday evening: “We have noted the US Supreme Court judgement on tariffs yesterday. President Trump has also addressed a press conference in that regard. Some steps have been announced by the US Administration. We are studying all these developments for their implications.”
After Trump's 15 per cent tariff proclamation, the tariffs on Indian goods will be 10 per cent from the existing 25 per cent. Now Trump has again announced hiking these tariffs to 15 per cent. This levy, if notified, will be over and above the existing MFN or import duties in the US.
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For instance, if a product faces a 5 per cent MFN duty, an additional 15 per cent will be imposed, taking the effective duty to 20 per cent.
Earlier, this was 5 plus 25 per cent.
There is no clarity, however, about what the tariff imposed by the US will be on countries, such as India, after the 150-day period.
To finalise the legal text for the first phase of the bilateral trade agreement, the Indian team is scheduled to meet its counterparts in Washington from February 23-26, 2026.
Commerce Minister Piyush Goyal had said the deal may be signed in March and implemented in April.
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