55% of India's exports now free from 18% duty; Exporters may seek refunds on tariffs paid: Experts

The MFN tariffs are the base rates the US applies to all WTO members. The average US MFN tariff on Indian goods is approximately 2.8% to 3.3%, which varies across sectors

• US Supreme Court removes 18% tariffs on 55% of Indian exports
• Most Indian goods now face lower MFN tariffs of 2.8% to 3.3%
• Section 232 tariffs continue on steel, aluminum, and auto parts

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The US Supreme Court's verdict to strike down reciprocal tariffs would free about 55% of India’s exports to the US from the 18% duty, Ajay Srivastava, Founder, Global Trade Research Initiative (GTRI) said. This means $48 billion worth of exports facing reciprocal tariffs since September 2025 will now be exempt from those duties.

The reciprocal tariffs imposed on 55% Indian exports by US since September were 50 percent -- which were reduced to 25 percent earlier this month. The same was supposed to be reduced to 18 percent, post the signing of India-US bilateral trade agreement.

The US Supreme Court ruling effectively, however,  eliminates the 18 percent reciprocal tariff agreed earlier under the India–US trade framework, bringing tariffs on most Indian goods back to Most Favoured Nation (MFN) levels.

"These exports (55%) would be subject only to standard Most Favoured Nation (MFN) tariffs," Srivastava said. The MFN tariffs are the base rates the U.S. applies to all WTO members. The average US MFN tariff on Indian goods is approximately 2.8% to 3.3%, which varies across sectors.

The US Supreme Court on Friday ruled that President Donald Trump overstepped his authority in imposing a wide range of tariffs that disrupted global trade, dealing a blow to a key instrument the president has used to push his economic agenda.

In a 6–3 decision, the conservative-majority court held that the International Emergency Economic Powers Act "does not authorise the President to impose tariffs," effectively blocking the use of the law to justify such trade measures.

On the remaining exports, Section 232 tariffs will continue — 50% on steel and aluminium and 25% on certain auto components. Section 232 duties remain in force, covering sectors deemed critical to US national security such as steel, aluminium, automobiles, timber, copper and certain machinery products.

These tariffs stem from separate trade investigations and were not part of the emergency tariff measures overturned by the court.

'India should re-examine trade deal'

On the interim trade framework signed by US-India, last week, experts say that this judicial correction in the US further strengthens our negotiating hand.  "The ruling should prompt India to re-examine its trade deal with the United States," Srivastava added.

"The interim pact serves as a critical 'stability bridge,' protecting Indian exporters from sudden volatility while tariff-level negotiations continue. We see this as a net positive; it allows India to double down on its manufacturing momentum without the immediate threat of arbitrary trade barriers," Saurabh Agarwal, Tax Partner, EY India said.

India's focus remains on transitioning the interim trade agreement into a comprehensive Bilateral Trade Agreement that honors reciprocal market access while safeguarding India's strategic domestic priorities, say experts.

In February 2026, India and the US agreed to an interim tariff framework that will reduce reciprocal duties on Indian goods to 18 percent, while carving out zero-duty access for select sectors including pharmaceuticals and certain high-value industrial goods

The interim deal is expected to be signed around March.

With the Supreme Court now invalidating the broader IEEPA-based tariffs, exporters could see further relief, including the possibility of refunds for duties collected under the struck-down authority. The exact mechanism and timeline remain unclear.

Manoj Mishra, Partner, Grant Thornton Bharat, said: " The ruling is likely to give much-needed relief and a competitive boost to Indian exporters, while also paving the way for potential refunds of tariffs collected without adequate legal basis."

"However, the US is expected to continue relying on sector-specific tariffs under Section 232 in strategic sectors, underscoring the importance of advancing the bilateral trade agreement to secure durable tariff certainty and stable market access for Indian exporters," he added.

India is one of America’s largest trading partners, with Indian exports of over $86 billion in 2024-25.