The Empty Seat in Washington
Trade is a game of leverage. New Delhi just walked away from the table. The delegation was ready. The flights were booked. Then the legal architecture of American protectionism collapsed. CNBC reported this morning that India has officially delayed its high-level trade visit to Washington. This is not a mere scheduling conflict. It is a calculated response to the chaos currently defining U.S. trade policy. The Indian Ministry of Commerce is now reassessing its position after a weekend of unprecedented legal and executive volatility in the United States.
The standoff centers on the sudden shift in tariff structures. Just weeks ago, both nations appeared to have found a middle ground. A framework for an interim trade deal promised to lower duties on Indian goods from a staggering 50 percent down to 18 percent. That deal is now in jeopardy. The catalyst was a 6-3 decision by the U.S. Supreme Court on February 20. The court ruled that the executive branch exceeded its authority under the International Emergency Economic Powers Act. This effectively nullified the country-specific tariffs that had been used as a cudgel against New Delhi for the past year.
The SCOTUS Shockwave
The legal vacuum lasted less than twenty-four hours. President Trump responded by invoking Section 122 of the Trade Act of 1974. This move established a universal 10 percent global tariff. By Saturday evening, that rate was hiked again to 15 percent. For Indian negotiators, the math no longer works. Why sign a bilateral pact for an 18 percent rate when the global baseline has shifted to 15 percent? The leverage has flipped. According to Reuters, this is the first major diplomatic fallout from the court’s intervention. India is the first to blink, but they will not be the last.
New Delhi is playing a long game. They are watching the legal challenges to Section 122 with intense interest. This statutory authority allows for a 150-day temporary tariff to address balance-of-payment deficits. It is a narrower power than the emergency authority struck down by the court. If the 15 percent baseline is also vulnerable to litigation, India has no reason to lock itself into a higher negotiated rate. The uncertainty has turned the negotiation room into a house of mirrors.
The Russian Oil Pivot
The underlying tension remains the energy trade. Washington has used tariffs as a penalty for India’s continued purchase of Russian crude. In late 2025, duties were doubled to 50 percent specifically to pressure the Modi administration. The interim deal was contingent on India reducing its Russian imports from 1.2 million barrels per day to 800,000 by March. Per the Bloomberg analysis of the February 6 framework, this energy pivot was the cornerstone of the agreement. Without a stable tariff environment, India is unlikely to fulfill its promise to “Buy American” at the scale previously discussed.
The volatility is visible in the data. Over the last twelve months, Indian exporters have faced a rollercoaster of duty rates. This has decimated the margins for textile and pharmaceutical firms. These sectors represent the backbone of India’s export economy. They cannot operate in a market where the rules of engagement change via executive order every Saturday night.
Tariff Volatility Index: India-US Trade (2025-2026)
| Date | Action Taken | Effective Tariff Rate |
|---|---|---|
| February 13, 2025 | Base Trade Target Set | 8.2% (Applied) |
| April 2, 2025 | Reciprocal Tariff Imposed | 26% |
| August 6, 2025 | Russian Oil Penalty | 50% |
| February 2, 2026 | Interim Deal Framework | 18% |
| February 20, 2026 | SCOTUS Ruling (IEEPA Invalidated) | Variable |
| February 21, 2026 | Section 122 Global Tariff | 15% |
The data shows a clear trend of escalation followed by a legal reset. The current 15 percent rate is legally precarious. It is subject to a 150-day statutory limit. This creates a deadline that both sides are now racing toward. India’s chief negotiator, Darpan Jain, was scheduled to arrive in Washington on February 23. That visit is now postponed indefinitely. The official line from the Office of the U.S. Trade Representative is that both sides need more time to study the legal implications. The reality is that the deal is being rewritten in real-time.
India-US Tariff Volatility (Feb 2025 – Feb 2026)
The Section 122 Gambit
The use of Section 122 is a desperate fallback. It is designed for balance-of-payment emergencies, not long-term industrial policy. The administration is gambling that the 15 percent global rate will survive judicial scrutiny long enough to force India back to the table. But the leverage has shifted to New Delhi. If the 15 percent rate applies to everyone, India no longer needs to make massive concessions on Russian oil to get a preferred rate. They are already at the baseline.
The next critical data point is the March 15 deadline for the Russian oil import review. Washington has warned that failure to meet the reduction targets will result in “secondary tariffs.” However, the Supreme Court’s ruling has cast a shadow over the legality of such measures. If the administration cannot use IEEPA to target specific countries, the entire strategy of using trade as a weapon of foreign policy begins to unravel. Watch the volume of Indian textile exports in the coming weeks. If they surge under the 15 percent rate, the incentive for a bilateral deal vanishes entirely.
