Tariffs, Trade, and Trust: India’s Interim Deal in the Shadow of a US Supreme Court Verdict

The India–US interim trade agreement, announced with much fanfare earlier this month, has suddenly found itself in a storm. The US Supreme Court’s 6–3 verdict striking down President Donald Trump’s global tariffs has not only shaken Washington’s economic agenda but also cast a long shadow over New Delhi’s hurried embrace of the deal. What was projected as a breakthrough in bilateral trade now appears riddled with contradictions, political theatre, and domestic anxieties on both sides.

The chronology is telling. On February 2, President Trump declared that a deal had been reached with India, effective immediately at Prime Minister Modi’s request. The announcement was framed as a triumph: punitive tariffs on India’s imports of Russian oil were lifted, reciprocal tariffs reduced from 25% to 18%, and India’s commitment to stop sourcing energy from Moscow was highlighted as proof of alignment. Trump, in his characteristic style, added layers of rhetoric—claiming his relationship with Modi was “fantastic,” that he had stopped a war between India and Pakistan using tariffs, and that India was finally paying its fair share. For Modi, the optics were equally valuable: a handshake with Washington, a narrative of global leadership, and a diversion from domestic criticism in Parliament.

But the Supreme Court’s ruling has changed the terrain. Chief Justice John Roberts, writing for the majority, declared Trump’s sweeping tariffs unconstitutional, arguing that the president had exceeded his authority. This verdict effectively dismantled the legal foundation of Trump’s global tariff regime. Yet Trump insisted “nothing changes” for India, asserting that tariffs would still apply and the deal remained intact. His words, however, only deepened confusion. If the tariffs themselves were struck down, how could India still be paying them? Was the interim agreement insulated from the ruling, or was it now legally void? These ambiguities have left both governments scrambling for clarity.

In India, the opposition seized the moment. Congress General Secretary Jairam Ramesh demanded that the government pause the deal, renegotiate terms, and categorically assure farmers that no import liberalisation would occur until Washington clarified its position. He accused Modi of rushing into the agreement despite knowing the Supreme Court verdict was imminent, suggesting it was a political distraction from Rahul Gandhi’s remarks in Parliament and former Army chief Naravane’s revelations in his book. Rahul Gandhi went further, branding Modi “compromised” and calling the deal a betrayal of national interest. The Congress narrative is sharp: the trade deal has become an ordeal, exposing desperation and surrender.

The agrarian dimension is crucial. India’s farmers, already battle-hardened from historic protests against agricultural reforms during the present regime, view any liberalisation of imports as a direct threat to their livelihoods. The interim deal, by opening doors to American agricultural products, risks undercutting domestic producers. Ramesh’s demand reflects this anxiety: no liberalisation until clarifications are made, no concessions until farmers’ interests are safeguarded. For a government that faced months of farmer protests—arguably the most significant mass mobilisation in recent years—ignoring this sentiment could be politically costly. The opposition is positioning itself as the defender of agrarian India, framing the trade deal as another instance of the government prioritising optics over substance.

On the American side, the setback is equally stark. Trump’s tariffs were central to his economic nationalism, a pillar of his second-term agenda. The Supreme Court’s ruling not only undermines that pillar but also complicates his narrative of “fair deals” with partners like India. His insistence that “nothing changes” is less a statement of fact than an attempt to preserve political momentum. Yet the contradictions are glaring: if tariffs are unconstitutional, then the very basis of the India–US interim agreement is unstable. For Washington, the challenge is to salvage credibility while maintaining strategic ties with New Delhi.

The broader context cannot be ignored. India’s trade policy is increasingly entangled with geopolitics—energy imports from Russia, strategic alignment with the US, and domestic pressures from farmers. The interim deal was meant to signal India’s reliability as a partner, but the Supreme Court verdict has exposed its fragility. For Modi, the risk is twofold: being seen as hasty abroad and compromised at home. For Trump, the risk is losing the legal ground beneath his economic agenda while insisting on continuity.

The incident, though unfortunate, reiterates that great rhetoric often leads to great failure. When governments rush into agreements without anticipating judicial verdicts, when leaders prioritise spectacle over scrutiny, the bargain struck is not with truth but with the future itself. India’s farmers, who once forced the government to repeal controversial agricultural laws, now stand as a reminder that domestic constituencies cannot be ignored in the pursuit of international optics. Their protests were historic, and their anxieties today are real.

As the dust settles, one question looms large: will the government pause, reflect, and renegotiate to protect national and agrarian interests, or will it continue to cloak uncertainty in rhetoric? The Supreme Court has spoken, the opposition has demanded, and the farmers are watching. The government must answer—does it stand with clarity and substance, or with haste and illusion?