US Imposes 10% Global Tariff, India Navigates Trade Uncertainty
The US Supreme Court recently struck down the reciprocal tariffs, prompting President Donald Trump to announce a temporary 10% global tariff on imports, effective February 24, 2026, for 150 days. Certain products, including critical minerals, electronics, pharmaceuticals, aerospace items, passenger vehicles, and agricultural goods, are exempt. For India, this move reduces the tariff burden on most exports from 25% to the standard Most Favoured Nation (MFN) rates, while around 40% of exports, including smartphones, petroleum products, and medicines, remain exempt.
The ruling has left both Indian industry and government in a wait-and-watch mode as bilateral trade discussions with the US continue. Exporters are reassessing strategies, as the 10% tariff provides relief but alters the anticipated benefits from the interim trade agreement. India had previously negotiated an 18% reciprocal tariff under the deal, but the new global tariff renders some of these concessions less impactful, especially as sector-specific Section 232 tariffs on steel, aluminum, and auto components persist.
Industry bodies like the Confederation of Indian Textile Industry (CITI) are evaluating the implications for textile and apparel exports, the largest segment of India’s US trade. Experts note that while the Supreme Court ruling provides relief and potential tariff refunds, sector-by-sector and country-specific differences in tariffs could create fresh uncertainties. This underscores the urgency of finalizing the bilateral trade agreement to secure long-term market stability for Indian exporters.
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