Trump tariffs: As US court declares them unlawful, India must reassess trade deal
Virendra Pandit
New Delhi: With a federal court on Tuesday striking down President Donald Trump’s controversial move to impose reciprocal tariffs on the trading partners of the US, an Indian think tank has urged New Delhi to reassess its trade deals with Washington DC, the media reported on Wednesday.
The Global Trade Research Initiative (GTRI) said that India should proceed cautiously in its ongoing bilateral Free Trade Agreement (FTA) negotiations with the US.
A US federal court at Manhattan also ruled that President Trump can’t use emergency power to impose tariffs on foreign countries. Such a key legislation must be passed by and come from the US Congress.
Ajay Srivastava, founder of GTRI, said that India should resist any agreement shaped by threats or based on unlawful measures.
He said that the Trump-era tariffs violate World Trade Organisation (WTO) rules as well as the domestic laws of the US as confirmed by the federal court. “With the Trump tariffs standing on shaky legal ground, India must pause and reassess its negotiation strategy before committing to an FTA that could disproportionately favour US interests,” he said in a statement.
India and the US are likely to sign the first tranche of the much-anticipated Bilateral Trade Agreement (BTA) before July. The India-US trade deal would mark a significant milestone in economic relations between the two big economies, potentially opening new avenues for bilateral commerce and investment.
For the fourth consecutive year, 2024-25, the US remained India’s largest trading partner, with bilateral trade valued at USD 131.84 billion. India had a trade surplus of USD 41.18 billion in goods with the US in FY25.
After the landmark ruling of the US federal court, the stock markets globally reacted positively, with excitement seen in major Asian markets of Japan and Korea. Japan’s Nikkei and Korea’s Kospi surged two percent after the ruling.
In reaction, the Indian stock market benchmark Sensex at BSE also jumped over 500 points but lost steam soon.
