In a landmark 6-3 decision on February 20, 2026, the US Supreme Court struck down the administration’s sweeping reciprocal tariffs. The court ruled that the use of the International Emergency Economic Powers Act (IEEPA) to bypass Congress was an overreach of presidential authority. The ruling effectively nullifies the aggressive 50% duties previously imposed on major trading partners, including India. This legal shift has immediately removed roughly $133 billion in annual duties from the global trade balance, creating a temporary vacuum in US trade policy. The White House responded within 24 hours by invoking Section 122 of the 1974 Trade Act. This move establishes a new 15% global tariff aimed at addressing the national balance-of-payments deficit. Unlike the previous regime, this emergency measure is legally capped at 15% and is valid for only 150 days without explicit congressional approval. Markets view this as a significant reduction from the prior 50% peak, offering a period of relative relief for global exporters. For India, the impact is notably positive. While the 15% global surcharge applies, recent bilateral negotiations have further cushioned the blow. Following a fresh trade framework, many Indian exports now face an effective rate of approximately 18%, down sharply from the previous 50% level. Emkay Global estimates that when accounting for sector-specific exemptions in pharmaceuticals, gems, and high-tech components, India’s aggregate effective tariff burden sits between 11% and 13%. Key Indian export sectors, particularly textiles, leather, and engineering goods, are expected to see an immediate recovery in competitiveness. The removal of the 25% "punitive" surcharge—previously tied to geopolitical oil purchases—is seen as a major diplomatic win for New Delhi. Analysts have observed a sharp rally in Indian export-oriented stocks, with benchmark indices like the Nifty and Sensex showing strong gains as trade predictability returns. Global trade remains in a state of high-speed recalibration. While the 15% surcharge is currently active, the administration is simultaneously launching Section 301 and Section 232 investigations. These alternative legal paths could lead to more durable, sector-specific tariffs on automobiles, steel, and semiconductors by late 2026. For now, the 150-day window under Section 122 provides a critical breather for global supply chains to reorganize. Investors and corporate trade departments are pivoting toward "trade diversion" strategies to mitigate future volatility. The focus is shifting toward reinforcing bilateral agreements and securing product-level exemptions. Although the immediate "tariff shock" has eased, the transition from emergency executive orders to congressional-dependent trade law suggests a more litigious and complex environment for the remainder of the year.