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Informist, Monday, Feb. 23, 2026

By Eshitva Prakash

MUMBAI – Benchmark indices are seen moving in a range in the near term with a positive bias as investors await more clarity on the US import tariff situation. Analysts believe the US Supreme Court striking down import tariffs was a net positive for India but US President Donald Trump's decision to impose a temporary 15% global tariff for up to 150 days may signal further volatility in US trade policy. Volatility is also likely due to the expiry of the Nifty 50 weekly derivatives contracts Tuesday.

"I am expecting investors to be uncertain about taking bets in the market for at least the next few days," Sunny Agrawal, head of research at SBICAP Securities, said. "(Donald) Trump is not likely to give up on this (idea of tariffs) after the judgement, and the 15% blanket tariffs is a reflection of that," he said. The analyst expects a hindrance to the decision-making capability of US companies, which will also hurt domestic exporters. Agrawal expects the US President to find other ways to raise import levies rising going forward. While the judgement has given a breather to Indian companies, the current rate of 15% is unlikely to give a meaningful boost over the US' last agreed 18% levy on India.

"However, it is important to note that this cut brings us at par with some of our South-East Asian peers, who had an edge over us, owing to lower tariffs," Agrawal added. The effective tariff rate will be nearly the same for other Asian countries, excluding China, which will continue to face a higher effective rate, helping Indian exporters.                   

"The (US) SC judgement is, indeed, a landmark decision which will seriously impact Trump's tariff weaponisation strategy," V.K. Vijaykumar, chief investment strategist, strategist at Geojit Investments, said in a note. The analyst expects the new 15% global tariff imposed under section 122 to be challenged in courts and the probability of this decision getting annulled is high since section 122 only allows the US president to impose tariffs to tackle a serious balance of payments crisis.

India could benefit from lower tariffs, especially in sectors such as auto components, electronics, textiles, and pharmaceuticals, JM Financial Services said in a research report. The ruling may also support the India–US trade discussions and strengthen India's position in global supply chains as US firms diversify beyond China, the brokerage said. However, the risk of new tariffs under different US laws still persists, the brokerage added. "Structurally, the judgment signals a shift towards a more rule-based and Congress-driven US trade framework, with implications for global trade stability over the medium term," the brokerage added. 

The Section 122 tariffs will buy the Trump administration more time to explore alternatives to rebuild the tariff wall, Emkay Global Financial Services said in a report. However, a return to the previous breadth and intensity of tariffs looks unlikely, the brokerage said. Other than the sentimental benefits, the brokerage said that following these developments, around 55% of India's exports to the US will now face only 15% tariffs, while around 40% will remain exempt from tariffs. The rest will face their respective tariff rates under Section 232 of the US Trade Expansion Act, but India does not export much of these goods to the US. With this, the effective tariff rate on Indian exports to the US is now likely to be 11–13%, the brokerage said.

The extent of effective relief is contingent on countries' export dependence on Section 232 goods such as steel, aluminium, copper, automobile, etc., according to Emkay Global. Most of India's Asian peers will have similar effective tariff rates, barring China, whose effective rate is likely to be above 15%, the brokerage said.

Elara Capital expects this tariff cut to flare up renewed uncertainties for global trade. Select sectors stand to benefits from this tariff reduction, rather than the overall economy, the brokerage said. "While the Supreme Court ruling removes a critical event for the markets, we remain skeptical about the next steps the (Trump) administration may take," Elara Capital said. "The... lag until the next move by the administration is likely to raise uncertainty among US importers and may front-load business spending and imports in 1HCY26 (the first half of 2026) to take advantage of 10% tariffs, getting into wait and watch mode in the next half."

Amid uncertainty over the US policies, the next steps taken by the Indian government will also be in focus. Finance Minister Nirmala Sitharaman Monday said the Indian government is assessing the potential impact of the US trade development on India's bilateral trade deal with the US. On Sunday, India delayed the visit of its trade negotiators to the US after the US Supreme Court's judgement. Analysts expect several countries to follow suit and re-negotiate their prior trade arrangements with the US.

US-Iran tensions will remain an overhang on the markets until a deal is reached, Aggarwal said. "Import bills running up is never a good idea, particularly when India, like many other Asian countries, is so sensitive to Brent crude price fluctuations," he added. However, the analyst expects the currently elevated levels of crude oil to normalise and expects the critical commodity's price to normalise under $70 per barrel once the tension between the two countries eases.

The Nifty has been consolidating in the range of 25400–25900 in the last 7–8 sessions, a report by Bajaj Broking said. Only a breakout above or a breakdown below this range will signal next direction, the report added. On Monday, the Nifty 50 ended at 25713 points, up 141.75 points or 0.6%. The BSE Sensex ended at 83294.66 points, up 479.95 points, up 0.6%.  End

Edited by Akul Nishant Akhoury

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