A US Court’s Decision Against Trump’s Tariffs Could Benefit India in BTA Negotiations
US Court Ruling on Trump-Era Tariffs May Benefit India in Trade Negotiations
A recent ruling by a US court deeming the tariffs imposed during the Trump presidency as illegal could provide India with a more favorable position in ongoing Bilateral Trade Agreement (BTA) negotiations with the United States. However, experts advise exercising caution, indicating that this development may alter the US’s approach to negotiations. To prevent unbalanced concessions in terms of tariffs, intellectual property laws, and market access, India must reevaluate its trade strategies during current discussions.
According to reports, the court’s decision has not resulted in any significant excitement among domestic exporters. Still, S C Ralhan, President of the Federation of Indian Export Organisations (FIEO), believes that while the court orders will take time to implement, they might benefit Indian negotiators. “It will take two to three days for clarity to emerge, but it appears to be a positive indication for India,” he stated. Following the US Court of International Trade’s declaration that former President Trump’s tariffs associated with “Liberation Day” violated the International Emergency Economic Powers Act (IEEPA), the Trump administration has launched an appeal against this ruling. This appeal process could extend to the Supreme Court, and the US is expected to continue imposing additional 10% baseline duties until a final decision is made.
The court highlighted that the legislation Trump used to impose these expansive import taxes did not grant him the requisite authority. Some analysts speculate that the appeal process might not take excessively long, and a clearer picture could emerge within a month. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), noted, “Given that the Trump tariffs are now legally vulnerable, India should reassess its negotiating tactics prior to finalizing an agreement that may inadvertently favor US interests excessively.”
Furthermore, this court ruling poses challenges for US trade negotiators who are currently maneuvering with expectations of high reciprocal tariffs while aiming to reduce or eliminate them. “If these reciprocal tariffs are revoked, then the baseline tariff for ongoing negotiations would revert to the Most Favoured Nation (MFN) tariff of 2.5%,” explained Ajay Sahai, the Director General and CEO of FIEO.
While the Trump administration has delayed the reimposition of country-specific tariffs, it continues to apply pressure on other nations to concede, advocating for unilateral tariff reductions and increased purchases of US goods to keep these tariffs at bay. For instance, the United Kingdom entered into a bilateral trade agreement on May 8, 2025, which resulted in tariff reductions on more than 2,500 US products, elimination of duties on US ethanol, and a boost in purchases of Boeing aircraft, while the US reciprocated with tariff cuts on fewer than 50 UK products, many of which were only reduced to the standard 10% rate.
Reports suggest that India is considering removing tariffs on a vast array of products, including automobiles and agricultural goods, as well as opening its government procurement market and relaxing intellectual property and data laws to favor US technology and pharmaceutical companies. Additionally, India may permit greater foreign market access, including approvals for Starlink’s satellite internet. According to Srivastava, “Such concessions appear to be one-sided, lacking in balance and fairness. India must resist any agreement constructed under duress or influenced by illegal measures.”
