India-US Trade Deal Stalls After Court Ruling, Probes
Get the Geopolitics newsletter
Daily geopolitics — wars, elections, sanctions, the diplomatic moves that move markets. Free.
- India's Commerce Minister Piyush Goyal conditioned BTA completion on receiving "competitive advantage" over Vietnam, Thailand, the Philippines, Indonesia, Malaysia, China, Bangladesh, and Sri Lanka — an unexpected reversal after 99% of the deal was reportedly finalized during USTR Jamieson Greer's New Delhi visit.
- The February framework required India to eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural products, while the US retained an 18% reciprocal tariff and the right to raise duties seven-fold above July 2025 levels — an asymmetric arrangement India initially hailed as a "landmark trade victory."
- India agreed to halt direct and indirect Russian oil imports in exchange for the US dropping its 25% ad valorem duty imposed in August 2025 — a major strategic concession given Russia's decades-long role as a dependable Indian partner.
- The US Supreme Court voided the framework's foundation by ruling Trump lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose "reciprocal tariffs," knocking out the tariff structure that underpinned the deal.
- The Trump administration then launched two Section 301 investigations: one targeting 54 countries including India for forced-labor enforcement (with potential additional duties of 10%), and another examining structural overcapacity across 22 sectors — seven of which fall within India, including broad construction-goods categories.
Why it matters: India already conceded sensitive agricultural and industrial market access and reversed its Russian oil alignment for a deal whose tariff backbone the Supreme Court then voided — leaving New Delhi exposed to fresh unilateral Section 301 duties even if the BTA is signed, which makes the agreement look more like a one-sided extraction than a reciprocal pact.
