The Indian benchmark indices have remained volatile this year, however, things could change drastically coming Monday. All eyes are on the US Supreme Court verdict on Trump tariffs, and the outcome could have a huge impact on Indian markets. The apex court is expected to decide on the legality of these tariffs by President Donald Trump under the International Emergency Economic Powers Act (IEEPA).
If the court strikes down tariffs, New Delhi would be among the biggest beneficiaries, as the United States levied a steep tariff on Indian goods. For the unversed, the US has levied tariffs of up to 50% on Indian products that also include an additional levy for purchasing crude oil from Russia. India also now faces a risk where it can be slapped with a tariff of up to 500%, as the Trump administration signed legislation that now allows it to do so.
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Market participants are closely watching not just the US Supreme Court’s verdict but also the fine print of the ruling. The key question is whether the court completely strikes down the tariff regime or delivers a partial ruling that allows trade tensions to continue.
“After the sharp correction yesterday triggered by the possibility of about a 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,” he added.
According to Vijayakumar, a complete rejection of the Trump-era tariffs could trigger a rally in Indian markets, as India has been among the worst-hit countries due to the 50% tariffs.
Analysts said a ruling against the tariffs would offer immediate relief to global risk assets, with Indian equities likely to benefit the most. Lower tariffs would reduce input costs, ease trade pressures, and improve earnings visibility, especially for export-oriented sectors that have been under stress due to high US duties.
However, if the Supreme Court upholds the tariffs, markets could remain volatile amid continued policy uncertainty. Higher tariffs would keep supply chain costs elevated, hurt corporate margins, and delay investment decisions. In such a scenario, experts expect markets to stay range-bound, with stock-specific moves rather than a broad-based rally.
