The pressure on Indian exporters is expected to ease after the landmark ruling by the US Supreme Court on Friday striking down tariffs imposed under emergency economic powers. However, the benefits are likely to unfold gradually rather than deliver immediate windfalls.
India, one of America’s largest trading partners, exported goods worth over $86 billion to the United States in 2024-25. However, over the past year, a large share of this trade faced headwinds after the Trump administration imposed sweeping reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA).
Ever since the tariffs were imposed on India in mid-2025, nearly $48 billion worth of Indian merchandise exports had been subjected to steep duties of up to 50%. Earlier this month, Washington removed an additional 25% penal component, offering partial relief. It also cut down the remaining 25% tariff to 18%.
The Supreme Court’s latest decision goes further, invalidating the legal foundation for the broader emergency tariffs and potentially easing market access for a wide range of Indian products.
Financial relief for Indian companies?
Beyond future trade, the court ruling could open the door to financial relief for exporters. Companies may become eligible to seek refunds for duties paid under the now-invalid emergency tariffs. However, trade experts caution that the process is likely to be complex and time-consuming.
If refunds materialise, they could improve cash flows for exporters who either absorbed higher costs or passed them on to US buyers at the risk of losing competitiveness.
How will the US handle refund claims?
The Supreme Court has referred the refund claims to the US Court of International Trade (CIT), which will supervise the process. The actual refunds will be processed by US Customs and Border Protection (CBP).
The relief, however, is limited in scope. It applies only to the “reciprocal” tariffs imposed under the IEEPA. Duties imposed under other provisions, such as Section 232 on steel and aluminium or Section 301 measures, remain unaffected and will continue to be in force.
Relief for 55% of India’s exports
The US Supreme Court’s decision is set to ease the burden on a significant portion of Indian exports. According to trade policy think tank Global Trade Research Initiative (GTRI), about 55% of India’s exports to the United States will now be spared the reciprocal duties that were to be reduced to 18% from 25% under the proposed trade arrangement.
Instead, these exports will face only the standard Most Favoured Nation (MFN) tariff rates, said GTRI founder Ajay Srivastava.
However, the relief is not across the board. Certain levies will remain in place, including Section 232 duties, which impose tariffs of 50% on steel and aluminium and 25% on select auto components. At the same time, products that account for roughly 40% of India’s export value to the US — such as smartphones, petroleum products and pharmaceuticals — will continue to remain exempt from US tariff measures.