Geopolitical and Economic Uncertainty in 2025-2026

The years 2025 and 2026 have been characterized by significant geopolitical and economic instability.

US Supreme Court Ruling

• The US Supreme Court declared President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) as unlawful.
• This ruling adds instability to global trade, although it reassures against executive overreach.

Trade Tariffs and Policies

• Trump announced a 10% global tariff on most goods, later increasing it to 15%.
• Indian exports to the US experienced fluctuating tariffs:
   
  • Initially received MFN (Most Favoured Nation) rates.
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  • Faced a reciprocal tariff of 26% and an additional 25% penalty for Russian oil imports.
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  • Settled at a lower 18% rate after a preliminary trade deal with the US.
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• The 15% tariff is temporary, lasting 150 days, with its future uncertain.
• Trade policy stability, with low tariffs, is unlikely to return soon.
• Refunds for tariffs collected, exceeding $100 billion, remain unresolved by the court.

India's Strategic Navigation

• India has adeptly maneuvered through an unpredictable global landscape.
• Successfully concluded trade discussions with the EU and agreement with the US.
• The recent US court ruling may offer India leverage in ongoing trade negotiations with the Trump administration.