Trump Tariffs Case: The US Supreme Court has further postponed its ruling regarding the legality of tariffs raised in US President Donald Trump’s term, leaving Indian exporters as well as markets in suspense and uncertainty. The raised tariffs of various goods from major trading nations including India are causing uncertainty among a few major sectors that largely depend on trading with the USA.
US Supreme Court Postpones Verdict on Trump-Era Tariffs
On Tuesday, the SCOTUS delivered three opinions, although it delayed the decision on Trump-era tariffs. The SCOTUS hasn’t given a timeline on the next hearing of the case. Normally, the opinions are delivered at around 10:00 a.m. ET or 8:30 p.m. IST. This contributes to another phase of a case with grave implications for Indian exports.
What is the Tariff Case About?
The issue at stake is concerning tariffs set on April 2, 2025, between 10% and 50% on various countries including India. The major issue of law is whether it is within the president’s powers based on the International Emergency Economic Powers Act (IEEPA) to impose tariffs without approval from Congress. The lower courts had found that some tariffs were unconstitutional, prompting a further appeal at the Supreme Court level.
Why India’s Stock Market Is on Edge Over US Tariffs
Trump-era tariffs have added to the volatility in Indian financial markets. A depreciated rupee, pull-back by the FIIs and underperformance of key indices like the Nifty 50 are some of the consequences. While a favorable ruling may come as respite, market experts are betting on an unlikely major rally, given the administration’s leeway to pursue alternative measures.
Experts Caution Against Expecting a Strong Market Rally
ICICI Securities Pankaj Pandey further adds that even if the Supreme Court rules that the tariffs are invalid, it won’t affect the markets much. “The relief, if any, would be of a limited nature. Alternative arrangements would be used nonetheless,” he says. Ajit Mishra of Religare Broking shares the same view that markets have already factored in these expectations.
How US Demand Drives Key Indian Industries
The US is the largest export destination of Indian exports, especially pharmaceutical exports, electronic items, textiles and seafood. Even if there is a favorable ruling, 10% of such exports to the US may be subjected to duties. The US is a vital component of India’s economy due to its size as well as consumption habits.
India’s dependence upon the US market is quite substantial. In 2024 alone, the US constituted almost 39% of India’s total export of timber, 37% of aluminium, and 34% of steel. Thus, in total, India’s total export of goods to the US in the last year touched almost $80 billion. Thus, even small tariff actions can have an indirect effect upon this relationship.
Export Sectors Most Impacted by Pending Tariffs
The major sectors that could get affected by tariffs include cars ($3.9 billion), steel ($2.5 billion), aluminum ($800 million), timber, copper and industrial vehicles. Labor intensive sectors such as textiles, gems and jewelry could get affected in case the tariffs continue or get imposed, indicating the concentrated impact that could be witnessed in specific sectors.
According to UN COMTRADE statistics, the worth of Section 232 impacted Indian exports that could be slapped with tariffs even if a favorable decision comes through stands at 8.3 billion dollars. This signifies about 10% of total exports sent to the US.
High-Stakes Risk: $50 Billion+ of Indian Exports Could Face Tariffs
If the SCOTUS gives the president the back-ing of the law concerning the emergency powers of IEEPA, the Indian exports of over $50 billion may also face continued tariffs in areas such as textiles, gems, jewelry and other employable sectors. Market conditions shall be affected by the decision, although analysts reaffirm markets in the Indian markets being guided by earnings and global cues.
