India must reassess US trade deal after Trump tariffs declared unlawful: GTRI

After a United States federal court blocked President Donald Trump’s move to impose reciprocal tariffs, India has been advised to tread carefully while negotiating its Free Trade Agreement (FTA) with the US.

On 28 May, a Manhattan-based federal court ruled that President Trump could not use emergency powers to introduce tariffs on foreign nations. The court said that only the US Congress has the authority to make such decisions, making Trump’s tariff order unlawful.

Read more: US court blocks Trump’s “Liberation Day” tariffs, citing overreach of power


The Global Trade Research Initiative (GTRI) reacted to the development, saying India should avoid signing any trade deal influenced by such “unlawful” pressure tactics. GTRI founder Ajay Srivastava stated that the Trump-era tariffs broke not only World Trade Organisation (WTO) rules but also US domestic laws, as confirmed by the court ruling.

“With Trump’s tariff strategy now on shaky legal ground, India must pause and rethink its negotiation approach before signing an FTA that could unfairly benefit the US,” Srivastava said.

Read more: Trump admin appeals US court ruling blocking tariffs
Earlier, on 23 May, government sources told media that India and the US were likely to sign the first phase of a long-awaited Bilateral Trade Agreement (BTA) before July. If signed, this deal would be a major step forward in economic ties between the two countries, possibly boosting trade and investment.

For the fourth year in a row, the US has been India’s top trading partner. In the financial year 2024–25, trade between the two nations stood at USD 131.84 billion. India enjoyed a trade surplus of USD 41.18 billion in goods during the same period.

Following the court ruling, global markets welcomed the news. Asian stock markets, including Japan’s Nikkei and South Korea’s Kospi, rose by 2 per cent. In India, the Sensex at the Bombay Stock Exchange jumped over 500 points shortly after the ruling but later lost momentum.

Inputs from ANI