India is reviewing the impact of a US court ruling that blocks President Donald Trump from imposing sweeping tariffs on imports, sources said.
The US court found the 1977 International Emergency Economic Powers Act, which Trump has cited as his basis for ordering massive increases in import duties, does not authorise the use of tariffs.
On April 2, the US announced tariffs against several countries including 26 per cent on India. However later it was suspended for 90 days till July 9. However, the 10 per cent baseline tariff imposed by America remains in place.
"We are in the process of reviewing the impact of the US court order," one of the sources said.
The order has come amid India and the US negotiating an interim trade agreement, with New Delhi pushing for full exemption from the 26 per cent reciprocal tariff on domestic goods.
Commenting on the order, domestic exporters said that it would be a good sign for India.
Think tank Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said that with the Trump tariffs standing on shaky legal ground, India must pause and reassess its negotiation strategy before committing to a free trade agreement that could disproportionately favour US interests.
He also said that now negotiators with the US are working with high reciprocal tariffs in mind and seeking to reduce or eliminate them.
While the Trump administration has suspended reimposing the country-specific tariffs, it is actively pressuring countries to make concessions, including unilateral tariff cuts and expanded purchases of US goods, to avoid these tariffs.
"India is reportedly preparing to eliminate tariffs on thousands of products including automobiles, and agriculture, open its government procurement market, weaken intellectual property and data laws to benefit US tech and pharma companies, and allow more foreign market access, including approving Starlink's satellite internet — mostly as one-sided concessions," Srivastava said But such a deal lacks balance and fairness. India should resist any agreement shaped by threats or based on unlawful measures, he added.
Union minister for commerce and industry Piyush Goyal on Thursday said that negotiations with the US for a bilateral trade agreement and with the European Union (EU) are well on track and progressing at a fast pace.
Goyal’s acknowledgment came after Reuters reported that a team of US officials will visit India next week for crucial discussions on the proposed interim trade agreement between the two countries.
Even as Indo-US negotiations inch forward, White House economic adviser Kevin Hassett on Thursday told Fox Business Network that three other global trade deals were “basically done” and more were in the pipeline.
Hassett has brushed aside a US trade court ruling on Wednesday that blocked most of Trump’s tariffs and found the President had exceeded his authority, calling it the work of “activist judges.” The administration, he said, was confident of winning an appeal.
The White House economic adviser has also emphasised that the setback would not derail the momentum: “If there are little hiccups here or there because of decisions that activist judges make, then it shouldn't concern you at all, and it’s certainly not going to affect the negotiations.”
