Indian and US officials have postponed a three-day meeting scheduled for this week to discuss their interim trade deal, people familiar with the matter said, describing a series of events since Friday as likely to impact the timeline New Delhi and Washington agreed to in March for an interim trade deal.
The U.S. Supreme Court on Friday struck down President Donald Trump’s use of emergency powers to impose tariff rates of his choosing, forcing his administration to rely on other legal provisions. Currently, the administration has used Section 122 of the Trade Act of 1974 but is legally examining a separate provision, Section 338, that could overcome the 15% rate and 150-day deadline limits that apply.
This suggests the United States has not yet settled on a strategy since the court blocked the last one, the people said, which they said complicates negotiations. One of them, who requested to remain anonymous, said: “Initially the US government said it could invoke Articles 232, 301 and 122 to counter the Supreme Court ruling. Talks are now revolving around 338. Any permanent agreement between two kings is not possible in such a volatile situation, amid a high level of uncertainty.”
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A second person confirmed that chief negotiator Darpan Jain’s scheduled departure on Sunday had been postponed. The source, who requested to remain anonymous, said: “Both sides believe that the proposed visit of the Indian chief negotiator and the team will be scheduled after each side has sufficient time to evaluate the latest developments and their ramifications. The meeting will be rescheduled at a date convenient for both parties.”
The postponement casts a shadow over the broader negotiation calendar. The aim of next week’s engagement was to finalize the legal text of the interim bilateral trade agreement, ahead of the expected visit of US Trade Representative Jamieson Greer in March to sign the deal. All such meetings from both sides are now on hold, the people mentioned above said.
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In a statement issued Saturday, the Commerce Department said it was studying the ramifications of the ruling and Trump’s subsequent moves. She said, “We noted the US Supreme Court’s ruling on tariffs yesterday. President Trump also spoke at a press conference in this regard. The US administration has announced some steps. We are studying all these developments to know their effects.”
The engagement scheduled for the rest of the month was linked to the joint statement the two sides issued on February 6, when they announced they had agreed on a framework for talks and March was the month in which they would reach an interim agreement, ahead of a larger bilateral trade agreement that Trump and Prime Minister Narendra Modi targeted when they met last year.
The new tariff mechanisms and rates amount to what officials described as changes in key components. Such changes may now require some reorganization on both sides, HT reported on Sunday. The February 6 joint statement specifically provides for such modifications: “In the event of any changes to agreed upon tariffs for either country, the United States and India agree that the other country may modify its obligations.”
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US Treasury Secretary Scott Besent indicated on Sunday that Washington intends to move forward with further changes to its tariff strategy through alternative legal routes. “The court did not rule against this administration’s tariffs. It said only that the IEEPA cannot be used to raise revenue. We will immediately turn to other established authorities — Sections 232, 301, and 122 — to keep our tariff strategy strong,” he said in a post on X.
Reports have since indicated that Section 338 could also be invoked, allowing Trump to impose tariff rates of up to 50% under the Tariff Act of 1930.
The astonishing pace of change since Friday has alarmed exporters. Tariffs on Indian goods rose to 50% before falling to 25% in early February, which the Americans complied with after another drop to 18%. Immediately after Friday’s ruling, those rates fell to 10%, rising to 15% on Saturday – the maximum allowed under Section 122.
As for India, the current rate (15%) is still better than the 18% agreed upon in the bilateral framework announced this month, and much lower than the rate on the day of liberation (26%). Emkay Global Financial Services, in an economic note, said the ruling was a “positive development for India”, adding that the US had “lost the immediate leverage of tariffs as a means of agreeing to globally favorable trade deals”. Analysts Madhavi Arora and Harshal Patel said that most countries will now renegotiate their trade agreements with the United States.
“India is also likely to take another look at its trade deal with the US, amid tariff easing. India is prima facie free to resume its purchases of Russian crude oil, but may not choose to do so, to maintain good relations with Trump. However, we believe the deal is likely to be renegotiated with a view to making it more equitable, with India now under less pressure to make major concessions,” they added in an update later on Sunday.
But uncertainty cuts both ways. The 150-day clock under Section 122 is underway, and the administration has not yet settled on what comes next. If the administration wants to impose blanket tariffs, it should go to Congress, said Neal Katyal, a lawyer who successfully challenged the tariffs in court. “If tariffs were a good idea, he would have no problem convincing Congress. That’s what our Constitution requires,” he said.
This was a central point of the Supreme Court’s ruling, which held that comprehensive tariff policy was within the purview of lawmakers – the US Congress – and could not be delegated or assumed by the president.
