There has been a turn in the ongoing ‘tariff war’ between America and India which has shocked the entire world market. US President Donald Trump’s strict trade policies have received a big blow from the Supreme Court. Amidst this legal turmoil, news of relief and concern has come together for India. On Saturday, February 21, 2026, Trump announced that he will now impose 15% duty on global imports including India. This decision came at a time when the Supreme Court curbed the unlimited powers of the President. This fee, which had once reached 50%, has now come down to 15%, but the story behind it is no less than a thriller film.
Supreme Court changed the whole game
The biggest turning point of this entire story was the decision of the US Supreme Court, in which with a majority of 63, the powers of the President were limited. The court clarified that the ‘International Emergency Economic Powers Act’ (IEEPA) does not allow the President to impose arbitrary global tariffs under emergency powers. This decision of the court declared the country-specific taxes imposed by the Trump administration illegal.
However, President Trump also did not accept defeat. A few hours after the court’s decision, he took recourse to Section 122 of the ‘Trade Act 1974’. Under this, they can impose global tariffs for 150 days without the approval of Congress. Earlier he had talked about keeping it at 10%, but after some time it was increased to 15%.
From 26% to 50% and then 15%…. The ‘roller coaster’ of tariffs
There were a lot of ups and downs regarding trade between India and America from the year 2025 to 2026. Sometimes the tariff increased, sometimes it decreased, sometimes the negotiations intensified and sometimes the tension increased.
- 13 February 2025- Prime Minister Narendra Modi and President Donald Trump decided that together the two countries will take mutual trade to more than 500 billion dollars by 2030. The intention was clear, to increase business. But the situation on the ground was not so easy. There remained differences between the two countries regarding tariffs.
- 46 March 2025- To reduce tension, Union Commerce Minister Piyush Goyal reached Washington DC. There he met US Trade Representative Jamieson Greer and other officials. The objective was to resolve business issues through negotiations and avoid conflict.
- April 2, 2025- America imposed a total tariff of 26% on Indian goods. There was 10% normal (baseline) duty and 16% additional reciprocal tariff. This decision was part of a comprehensive tariff policy applicable not only to India but to many countries. But this was considered a big blow for India.
- April 9, 2025 – Just one week later, the additional 16% tariff was stopped for 90 days. Due to this, the impact on India reduced to only 10%. This was a sign that the doors to negotiations were not closed yet.
- 26 June 2025- As the deadline approached, an Indian delegation again reached America. The effort was to ensure that the matter does not worsen further and that the ground for a compromise could be prepared.
- 31 July 2025- America announced that 25% tariff would be imposed on Indian goods, which was to come into effect from 7 August. This was a clear indication that America was adopting a tough stance.
- 6 August 2025- After this the situation became more serious. Citing India’s purchases of Russian oil, the US added an additional 25% tariff. Overall tariffs reached 50%. This came into effect from 27 August 2025 and was the highest level during the entire dispute.
- 1517 October 2025- Several rounds of talks took place again in Washington. By this time six formal rounds of talks had been completed. Both countries were trying for a solution, but consensus did not seem to be reached immediately.
- 31 January 2026- Commerce Minister Piyush Goyal said that India is working towards finalizing the agreement. This statement indicated that there may be some relief in tariffs.
- 2 February 2026- An interim trade agreement was finally reached. America reduced the tariff from 25% to 18%. In return, India reduced tariffs on some selected American goods to zero. This was considered a balanced step between the two countries.
- 2021 February 2026- Following a decision of the Supreme Court, President Trump implemented the first global tariff of 10% under Section 122 of the Trade Act of 1974. On February 21, he announced that this rate would be increased to 15%. However, this will be subject to the legal limit of 150 days.
Why did Trump impose 50% tariff?
The most challenging phase for India was when it had to balance between its energy needs and American business interests. When the tariff was increased to 50% in August 2025, the main reason behind it was India’s purchase of crude oil from Russia. The American administration was using it as a strategic pressure. That time was like a nightmare for Indian exporters, because the prices of Indian products suddenly doubled in a big market like America.
However, India, with its diplomatic acumen, completed several rounds of talks (a total of 6 formal rounds). Frequent meetings between Commerce Minister Piyush Goyal and US Trade Representative Jameson Greer laid the groundwork for an interim agreement that helped bring the tariffs down from the high level of 50%.
Will happen after a grace period of 150 days
At present the tariff may have been reduced to 15%, but the danger has not gone away. The legal limit for the order given by President Trump under Section 122 is only 150 days. What happens after this will completely depend on the stance of the US Congress (Parliament) and the final trade agreement between India and America.
From the perspective of the Indian economy, this 15% level is a big relief compared to 50%, but is still expensive compared to the 10% decided at the beginning of 2025. If the US Congress does not allow this tariff to be extended, trade routes may become easier for India. The coming few months are going to be very important for Indian exporters, automobile sector and steel industry.