Indian trade negotiators are “studying the implications” of the US Court of International Trade that has significantly curbed US President Donald Trump to impose sweeping tariffs as US trade negotiators are set to arrive in India for two-day talks on June 5 and 6, a senior government official said on Thursday.
The US negotiator’s visit to India comes following a major loss of leverage that was driving major US trade negotiations globally since Trump took over White House. However, government officials said that the long term basis of an India-US trade deal remains strong and that negotiations are in their final phase.
Trade experts have warned that US trade deals under the second Trump administration are one-sided as was evident in its trade deal with the UK and that India should guard against any adverse long term commitment under Trump’s pressure. Experts have also stressed that several of Trump’s tariffs and trade maneuverings are not WTO-complaint.
“The court holds, for the foregoing reasons, that IEEPA does not authorise any of the Worldwide, Retaliatory, or Trafficking Tariff Orders. The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the US court of international trade ruled on Wednesday.
Giving the order a far-reaching political and economic impact, the court stated that if the challenged tariff orders are “unlawful for the plaintiffs, they are unlawful for everyone”. However, the Trump administration immediately filed an appeal, meaning clarity on Trump’s authority will come from higher courts—but only after a protracted legal battle.
That said, the ruling does not affect tariffs imposed by the Trump administration under separate legal provisions—including the 25 per cent duty on steel, aluminium and automotive parts—where Indian exporters will continue to face elevated tariffs.
The court order offers a temporary breather for India, as Trump had on April 2 announced a steep 26 per cent reciprocal tariff, despite India and the US having agreed to begin negotiations for a trade deal. The tariffs were paused till July 8.
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Ignoring the surplus in services and the substantial profits earned by US companies in India, Trump repeatedly criticised the trade deficit in goods to seemingly pressure New Delhi into signing an early agreement.
Pressure on India to sign US deal
The court order temporarily grants India more flexibility in handling US demands during ongoing negotiations. A section of officials in the Ministry of Commerce and Industry had raised concerns about India’s willingness to open up most sectors to avoid reciprocal tariffs. These concerns stem from the fact that granting market access to one country typically invites similar demands from other partners in subsequent trade agreements, complicating negotiations.
During the talks, Trump officials pushed Indian negotiators to open up several politically sensitive areas—such as agriculture—which has traditionally been kept out of trade deals and accorded high protection. The United States Trade Representative (USTR) even cited India’s restrictions on genetically modified (GM) corn and soybean imports as non-tariff barriers, ignoring India’s concerns over food security.
In a bid to appease Trump, New Delhi had already announced several duty cuts—such as on bourbon whiskey and motorbikes—during the Union Budget presentation. The pressure to conclude a trade agreement with the US remains high, especially as India agreed to a Terms of Reference (ToR) to kick-start formal trade negotiations just prior to the April 2 reciprocal tariff deadline, as The Indian Express had reported.
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Despite progress in trade talk, Trump has continued his tariff rhetoric targeting India. After Apple announced that a majority of iPhones to be sold in the US would be produced in India, Trump said that Apple would have to pay a 25 per cent tariff if it sold iPhones in the US that are built in India or elsewhere. Trump also stated that he had told Apple CEO Tim Cook he does not want the company to expand its manufacturing operations in India unless it is to serve the Indian domestic market.
Push for far-reaching regulatory overhaul
US negotiators have also sought various regulatory changes to favour US corporate interests in India, ranging from relaxed data localisation rules to reforms in the patent regime—particularly in the pharmaceutical sector. In 2025, the US placed India on the Priority Watch List, claiming that India maintains high customs duties on IP-intensive products such as medical devices and pharmaceuticals.
“In the pharmaceutical sector, the United States continues to monitor the restriction on patent-eligible subject matter in Section 3(d) of the Indian Patents Act and its impacts. Pharmaceutical stakeholders also express concerns as to whether India has an effective mechanism for the early resolution of potential pharmaceutical patent disputes,” the US report on IPR released last month said.
The US push for better patent protection in India comes despite India being a key source of low-cost generic medicines for many countries, including the US. India has consistently resisted pressure from free trade agreement (FTA) partners to allow the “evergreening” of drugs—a strategy used by pharmaceutical firms to extend patent lifespans and maintain market dominance. However, trade experts said that India is facing repeated demands for years, both in WTO as well as bilateral trade deals.
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Data localisation and big tech challenges
While Trump advocated for freer data flows and expanded access for big tech firms in India, a 2018 United Nations Conference on Trade and Development (UNCTAD) report, Power, Platforms, and the Free Trade Delusion, highlighted how control over data has become a major source of market power and a barrier to new entrants.
A Standing Committee on Finance (2022–23), investigating anti-competitive practices by Big Tech, also noted that Google Play—being the dominant app distribution platform on Android—mandates the use of its payment system for paid apps and in-app purchases. “It appears that Google controls a significant volume of payments processed in this market,” the report said.
It also said that Google unfairly privileges Google Pay by prominently placing it on the Play Store, Android operating system, and Android-based smartphones, while skewing search results to favour its own app. The Competition Commission of India (CCI), in a preliminary order, observed that manipulation of such features could act as a powerful tool to divert traffic towards Google’s new apps—undermining fair competition.
Trump’s remaining tariff tools and their limitations
Arguing before the court to avoid an adverse ruling, US Secretary of Commerce Howard Lutnick stressed the limitations of other legal tools available to the Trump administration to tackle rising trade deficits, particularly with countries like China.
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Lutnick explained that alternatives—such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974—are not designed for national emergencies, are procedurally time-consuming, and do not permit immediate action.
“Under Section 232, the Department of Commerce has up to 270 days to conduct an investigation and submit a report to the President, who then has up to 90 additional days to decide whether to act, and a further 15 days to implement any action. Similarly, under Section 301, the United States Trade Representative must complete an investigation within 12 months, with additional time for enforcement. IEEPA is different—it allows the President to act immediately to protect national interests, provided all conditions under IEEPA are satisfied,” Lutnick told the court.
Without this tool, the President’s ability to formulate foreign policy would be severely constrained, and national security would be at risk, he added.
Expect no change in US intent
Markus Wagner, Professor of International and Comparative Law at the University of Wollongong, Australia, said in a social media post that IEEPA was “never the right vehicle” and that Trump administration lawyers were likely fully aware that its use would be found unlawful.
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“But that was likely never the point—basing US measures on IEEPA bought the Trump administration time. That time isn’t over yet, as it’s safe to predict that the Court of International Trade (CIT) decision will a) be appealed and b) any implementation of the decision, should it stand, will be delayed as much as legally possible,” Wagner said.
The underlying strategies or goals have not changed, he added.
“The bigger question is what other countries will do—whether to uphold some of the existing rules or find ways to mitigate the damage the Trump administration has done and will likely continue to do,” the professor said.