The Indian government expects both sides to restart talks and attempt to finalise a revised framework in the coming months, though the outcome will depend on which tariff instrument Washington ultimately chooses to deploy
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The official said the court’s decision has created a pause in the talks but India will keep a keen eye on what tools are employed by the US administration to impose additional tariffs. “We will have to see what tools they use. If they use another provision, we will assess whether the deal still makes sense. It will take three to four months,” the source said.
According to the official, the ruling has effectively triggered a review clause in the joint statement issued after the last round of talks, allowing both sides to revisit the terms if circumstances change. Clause 8 of the Indo-US joint statement is the review clause that categorically states that should the circumstances change, the deal would be reworked to make sure that the balance is maintained on both sides. “Trade deals are about preferential treatment. Once tariffs were declared illegal, we had the opportunity to rework the deal,” the source added.
The official emphasised that India does not want an antagonistic trade situation with the US, describing the American economy as a “$30-trillion market” and a critical partner. However, New Delhi is closely watching how Washington proceeds after the court ruling.
According to the source, the US has at least four alternative legal avenues under the US trade laws to impose tariffs even after the IEEPA ruling. These include Section 122 under the US Trade Act of 1974 which allows imposition of 15 pert cent tariffs for 150 days. Section 232 of US Trade Expansion Act, which is a provision allowing imposition of 50 to even 100 per cent country-wise or product-wise tariffs. Then there is Section 338 of the Smoot-Hawley Tariff Act of 1930, which has never been used by the US. It was enacted during the Great Depression that empowers the President to impose any tariff on any country for any period. The most powerful is Section 301 of US trade Act, which allows Washington to initiate investigations into unfair trade practices and impose tariffs on entire sectors or countries. “Under Section 301 there have been thousands of cases and the US government has almost always prevailed,” the official said.
Washington’s tariff strategy will be shaped partly by domestic economic considerations, including efforts by the Trump administration to avoid fuelling inflation. “They are selectively putting tariffs so that inflation does not go up,” the official said.
The Indian government expects both sides to restart talks and attempt to finalise a revised framework in the coming months, though the outcome will depend on which tariff instrument Washington ultimately chooses to deploy.
Published on March 7, 2026