India's 18 per cent tariff deal lasted a fortnight, and the rate it pays now rests on a third law

The headline number from the United States and India trade announcement of 6 February 2026 was 18 per cent. It is not the rate Indian exporters are paying today, it was superseded within a fortnight, and the tariff India actually faces now rests on a completely different section of United States trade law.

The joint statement issued by the White House on 6 February set out an interim agreement. The United States would apply a reciprocal tariff rate of 18 per cent to Indian goods, down from the 50 per cent reached by August 2025, with tariffs on generic pharmaceuticals, gems and diamonds, and aircraft parts to be removed on completion of the wider deal. India would eliminate or reduce tariffs on all United States industrial goods and a range of food and agricultural products, including dried distillers' grains, red sorghum for animal feed, tree nuts, fresh and processed fruit, soybean oil, wine and spirits, and offered concessions on cosmetics and medical devices. India stated an intention to purchase about 500 billion United States dollars of American energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over five years. Trade analysts at India Briefing noted the procurement language had been softened from committed to intends. Pulses and India's digital services tax, both present in earlier drafts, were dropped from the framework and left to the full bilateral trade agreement whose negotiations Donald Trump and Narendra Modi launched on 13 February 2025.

The legal foundation of the 18 per cent rate was Executive Order 14257, the reciprocal tariff order made under the International Emergency Economic Powers Act. On 21 February 2026, fifteen days after the joint statement, the United States Supreme Court struck that authority down by six votes to three. Chief Justice John Roberts anchored the majority in the constitutional text giving Congress the power to lay and collect duties, and wrote that the government conceded the president enjoys no inherent authority to impose tariffs during peacetime. Roughly 175 billion dollars in collected tariff revenue was thrown into refund limbo, and Treasury Secretary Scott Bessent suggested the question could be dragged out for weeks, months or years.

The administration replaced it the same week. Trump signed orders imposing a 10 per cent global import duty for 150 days under Section 122 of the Trade Act of 1974, a provision previously never used, which permits duties of up to 15 per cent for up to 150 days to address a balance of payments problem. Existing exemptions for aerospace, compliant North American vehicles, pharmaceuticals and certain critical minerals were kept. The White House told reporters on 21 February that India would face that temporary 10 per cent rate, while insisting the deal itself was intact. Trump said there was no change in the trade deal with India. India's external affairs ministry spokesperson Randhir Jaiswal said both sides were working to finalise the agreement and that a delegation led by the chief negotiator would travel to the United States the following week.

That replacement did not survive either. On 7 May 2026 the United States Court of International Trade issued a permanent injunction against the Section 122 tariff by two votes to one. Judges Mark Barnett and Claire Kelly held that the president's proclamation "fails to assert that those required conditions have been satisfied", rejecting the argument that a large trade deficit by itself established the statutory balance of payments trigger. Judge Timothy Stanceu dissented.

The rate India pays now comes from a third authority. On 23 July 2026 the United States Trade Representative announced action in Section 301 investigations into the top 60 United States trade partners, covering 99.4 per cent of United States imports, over failures to prohibit and enforce bans on goods made with forced labour. Economies that have adopted or committed to adopt such a prohibition, a group of 17 that includes India, Canada, Mexico, Indonesia, Pakistan and the United Kingdom, were set at 10 per cent. Those that had not were set at 12.5 per cent. Ambassador Jamieson Greer said the president recognises that decades of moral suasion have not eradicated forced labour from global supply chains. India had been facing the 12.5 per cent band as recently as June, and moved into the lower one after amending its foreign trade policy on 14 June 2026 to prohibit imports of forced labour goods, a change Greer acknowledged.

So the sequence is: 18 per cent agreed on 6 February under an authority struck down on 21 February; 10 per cent under Section 122 from late February until enjoined on 7 May; 10 per cent under Section 301 from late July.

None of this is settled. Trade experts quoted by the South China Morning Post argue the forced labour tariff lacks a credible factual basis as applied to Indian exports, and the same paper reports that hard talks lie ahead on the wider agreement, with United States demands and friction over India's purchases of Russian oil unresolved. What Indian exporters cannot yet know is which of these numbers will still be law by the end of the year.