If the apex court strikes down the tariffs, India could be among the biggest beneficiaries globally, given the outsized impact of Trump’s 50% duties on Indian exports and the looming threat of a devastating 500% tariff on countries importing Russian oil, legislation Trump recently approved that would hit India’s energy security and trade competitiveness hard.
Market participants are watching not just for the verdict itself, but for the details: whether the court delivers a complete takedown of the tariff regime or a partial ruling that leaves room for continued trade friction.
“After the sharp correction yesterday triggered by the possibility of about 500% tariff on India under the provisions of the Russia Sanctioning Act approved by President Trump, the market will be focused on the verdict expected today from the US Supreme Court on the legality of Trump tariffs,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. “There is a high probability of the verdict going against Trump. But the details are significant: that is, whether it would be a partial striking down of the tariffs or completely declaring the tariffs illegal. The market reaction would depend on the details.”
If the Supreme Court declares Trump tariffs illegal, there would be a rally in India since India has been the worst affected by the 50% tariffs, Vijayakumar added.
A ruling against the Trump-era tariffs could provide immediate relief to risk assets worldwide, with Indian equities positioned as key beneficiaries. Analysts say such an outcome would boost corporate profits by lowering input costs and easing trade frictions, while improving earnings visibility across export-oriented sectors that have been hammered by elevated US duties.
Conversely, if the Supreme Court upholds the tariffs, markets could face extended volatility and policy uncertainty. Elevated tariffs would sustain higher costs across supply chains, potentially crushing corporate margins and delaying capital expenditure decisions. In that scenario, experts expect range-bound markets with stock-specific action rather than broad-based gains.
The Tariff Bill
Trump’s tariffs are currently running at an annualised aRs 369 billion based on November data, according to Chris Wood of Jefferies. And the political winds are turning against them.
“Evidence from the latest polling data continues to show that tariffs are not popular,” Wood noted in his newsletter. The latest Economist/YouGov poll conducted between 20-22 December shows that 56% of respondents disapprove of the way Trump is handling the tariff issue, with only 36% approving. An earlier November poll revealed that 73% of Americans say Trump’s tariffs have increased the prices they pay either a lot (40%) or slightly (33%).
“This is not surprising since the longer the tariffs are in place, and they are currently running at an annualised aRs 369 billion based on November data, the more likely all of the bill will be paid for by the American consumer,” Wood said.
Signs of nervousness are emerging from the Trump administration itself. “There have also been signs of late that Trump has become less confident that the Supreme Court will rule in his favour,” Wood observed. “That could lead, in theory, to a huge refund bill for the Treasury potentially totalling more than aRs 100 billion, resulting in an administrative and bureaucratic nightmare, not to say a costly one. But that is likely to be fudged by some other manoeuvre.”
India’s Double Whammy: 50% Tariffs and the 500% Threat
For India, the tariff crisis represents a double threat. Beyond the existing 50% duties, the newly approved Russia Sanctioning Act legislation would authorise a punishing 500% tariff on countries importing Russian oil, a move aimed at curbing Moscow’s energy revenues but with devastating collateral damage for India.
“The tariff dispute between India and the United States has escalated, with former US President Donald Trump approving legislation authored by Senator Lindsey Graham that would authorise the imposition of a 500 per cent tariff on countries importing Russian oil,” said Harsimran Sahni, Head – Treasury at Anand Rathi Global Finance.
India has substantially increased imports of discounted Russian crude since the Ukraine conflict began. “If enacted, the tariff could sharply raise the cost of Indian exports to the US, undermining trade competitiveness and adding pressure to an already fragile global economic environment,” Sahni warned.
“For India, the impact could extend beyond trade disruptions to broader macroeconomic implications. Higher tariffs may slow economic growth by affecting export-oriented sectors, while elevated energy costs could strain inflation management,” he added. Government interventions to manage supply and demand could influence liquidity conditions and push yields higher.
Buying opportunity?
The sharp market pullback this week has created selective opportunities, according to strategists. “In the sharp market pullback this week even stocks which will not be impacted by any draconian action by Trump have been affected,” Vijayakumar noted. “Segments like financials, consumer discretionary and industrials that have corrected due to the overall market weakness can be accumulated now for long-term investment.”
Analysts believe these segments, which corrected largely due to macro overhangs rather than fundamental deterioration, could attract buying once clarity emerges from tonight’s verdict.
The Supreme Court’s decision will either validate months of trade uncertainty or blow open the door for a dramatic reversal and Indian markets are positioned squarely in the crosshairs.
Also Read | AMFI Data: Mutual fund SIP inflows hit fresh record high of Rs 31,002 crore in December
(Disclaimer: The recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times.)
