US Supreme Court Defers Decision on Trump Tariffs- How It Could Affect India

The U.S. Supreme Court is holding back its decision on the legality of President Donald Trump's global tariffs. The court has not indicated when it would take up the matter again. The world is closely watching how the court will decide, as the Trump administration's tariff measures are severely affecting the global trade.

The court is yet to decide whether the president has the unilateral authority to impose sweeping tariffs by citing national security or emergency powers. A look at how the verdict, whatever it may be, affects India's trade with the US.

Strong reliance on the US market
If the US Supreme Court allows these powers to continue under the International Emergency Economic Powers Act, known as IEEPA, Indian goods worth more than 50 billion dollars could continue to face import duties above 50 per cent. This law allows the US president to act quickly if there is an emergency and impose trade restrictions.

The hardest hit will be labour-intensive industries like textiles, garments, and carpets, as well as gems and jewellery. These sectors are employment-heavy and support large numbers of workers. They are also heavily dependent on the US market. Indian producers are closely linked to American retail supply chains, and because these products are often made to specific designs and price points, they cannot be easily redirected to other countries when demand weakens.

India's exports to the US stood at about 80 billion dollars in 2024, making the US the country's largest export destination. Medicines and mobile phone components account for a significant share of this trade in value terms. At the same time, Indian exporters rely more on the American market than any other for products such as shrimp, carpets, textiles, and certain jewellery items. In these categories, the US accounts for the largest share of India's total global exports.

This level of dependence creates vulnerability. When tariffs rise sharply, US importers often begin sourcing from alternative suppliers. Once these sourcing relationships change, it becomes difficult for Indian firms to regain lost business, even if trade conditions improve later.

Warning signs
Recent trade data suggests that the pressure is building up. In hair products used for wigs, India's share of US imports fell to about 51 per cent in September 2025, down from roughly 76 per cent during the first seven months of the year. In worked synthetic or reconstructed diamonds, India's share dropped to around 69 per cent in September 202 from about 93 per cent earlier in the year.

The decline is even more pronounced in some high-value categories. India's share of US diamond imports slipped to roughly 22 per cent in September from 51 per cent in the preceding months. Granite exports saw India's share collapse to just 9 per cent from nearly 48 per cent. In certain stone products, the share fell to around 31 per cent from earlier highs of 88 per cent, according to reports. These shifts indicate that US buyers are reducing their dependence on Indian suppliers.

Even if emergency tariffs end, duties remain
There is a possibility that the Supreme Court could strike down the emergency tariffs imposed under IEEPA. Even then, the pressure would not fully disappear, as tariffs imposed under Section 232 of the US Trade Expansion Act of 1962 would remain in place. This law allows the US to levy duties after investigations conclude that certain imports could pose a risk to national security. Unlike emergency powers, these tariffs are based on formal and detailed reviews.

Products covered under Section 232 include steel, aluminium, automobiles, timber, copper, and selected machinery. In 2024, India exported about 8.3 billion dollars' worth of such goods to the US. This accounts for 10.4 per cent of India's total exports to the American market.

Key industries remain exposed
Automobiles form the largest share of exports affected by national security tariffs, with shipments worth about 3.9 billion dollars. Steel exports stood at roughly 2.5 billion dollars, while aluminium exports were close to 800 million dollars. Timber, copper, and industrial vehicles also face significant exposure.

Dependence on the US market is particularly high in these sectors. In 2024, nearly 39 per cent of India's timber exports were to the US. The US also bought about 37 per cent of aluminium exports and roughly 34 per cent of steel exports, according to reports. Such focus on a single market makes Indian exports vulnerable.

Long-term concerns for jobs and livelihoods
Even temporary tariff shocks can prompt US buyers to restructure their supply chains and shift sourcing to other countries. Once that happens, Indian exporters may struggle to recover lost orders. Labour-intensive sectors, which support millions of workers and small businesses, face the greatest risk, exporters based in Kerala said.

Regardless of how the court case concludes, Indian exporters are likely to face higher costs, weaker competitiveness, and continued uncertainty in their most important overseas market, reports acknowledge.

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