What Happened
- The US Supreme Court on February 20, 2026 ruled (6-3) in Learning Resources Inc. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorise the President to impose tariffs, striking down sweeping import tariffs imposed by the Trump administration
- This ruling is expected to ease pressure on India's Russian oil imports, as the secondary tariff regime built on IEEPA authority has been curtailed
- In August 2025, the Trump administration had imposed an additional 25% tariff on Indian goods to penalise India for purchasing Russian oil, taking the combined tariff on India to 50%; this executive order relied on IEEPA authority
- Analysts expect India to likely continue Russian oil imports, though at potentially reduced volumes — India imported 1.16 million barrels per day (mbd) of Russian oil in February 2026, down from an average of 1.71 mbd in 2025
- The US is now pivoting to use alternative tariff authorities — Section 301 (Trade Act 1974) and Section 232 (Trade Expansion Act 1962) — which the Supreme Court ruling does NOT affect
- India-US trade deal negotiations remain ongoing, with the oil imports issue remaining a point of friction
Static Topic Bridges
IEEPA — International Emergency Economic Powers Act and Presidential Tariff Authority
The International Emergency Economic Powers Act (IEEPA) was enacted in 1977 by the US Congress to give the President broad authority to regulate international commerce in response to a declared national emergency. The Trump administration invoked IEEPA to justify sweeping "reciprocal tariffs" on multiple countries, including secondary tariffs on nations purchasing Russian oil, arguing that this constituted a national emergency threatening US national security and economic interests.
- IEEPA enacted: 1977 (US statute)
- Article I, Section 8 of the US Constitution grants Congress the exclusive power to "lay and collect taxes, duties, imposts and excises" — i.e., tariff power belongs to Congress, not the President
- Supreme Court ruling (Learning Resources Inc. v. Trump, February 20, 2026): 6-3 decision; Chief Justice Roberts writing — IEEPA's grant to "regulate importation" does not include the power to impose tariffs; Congress has not clearly delegated tariff authority to the executive
- IEEPA tariffs raised over $160 billion from federal government before the ruling
- Tariff authorities NOT struck down: Section 301 (Trade Act 1974 — unfair trade practices), Section 232 (Trade Expansion Act 1962 — national security; covers steel, aluminum, semiconductors)
- Post-ruling: Trump announced new tariffs under Section 122 (Trade Act 1974) to partially replace IEEPA tariffs
Connection to this news: The August 2025 executive order imposing a 25% secondary tariff on India specifically targeting Russian oil purchases was grounded in IEEPA authority. The Supreme Court ruling undermines the legal basis of that specific executive order, giving India greater room to continue its Russian oil purchasing without the threat of IEEPA-based tariff escalation.
Secondary Sanctions — Definition, Mechanism, and India's Exposure
Sanctions in international trade law fall into two broad categories. Primary sanctions prohibit citizens and entities of the sanctioning country from transacting with the target country. Secondary sanctions extend this prohibition to third-country parties — penalising non-US companies and governments that do business with the sanctioned country, even if no US person or dollar is involved. The US employs secondary sanctions most aggressively in the context of Iran, Russia, and North Korea.
- Primary sanctions (US against Russia): US entities banned from transacting with sanctioned Russian entities (Rosneft, Sberbank, etc.)
- Secondary sanctions: Non-US entities face US market access restrictions, dollar-clearing denial, or tariff penalties if they deal with Russia
- India's exposure: India settled ~70% of Russian oil trades in rupee, dirham, and yuan to avoid dollar-clearing exposure; yet US imposed secondary tariff (August 2025) under IEEPA
- OFAC (Office of Foreign Assets Control): US Treasury arm that administers and enforces sanctions
- Rosneft and Lukoil: US sanctions on these Russian oil majors (October 2025, effective November 2025) affected Indian refiners' ability to use certain payment channels
- India's position: India has maintained it is not a party to Western sanctions on Russia; purchases are in national interest and within international law framework
Connection to this news: India's case illustrates how secondary sanctions create a "damned-if-you-do" dilemma for non-aligned economies: they cannot access sanctioned country's resources (oil) without risking their own trade relationship with the sanctioning power (US).
India's Energy Security — Diversification and Russian Oil Dependence
Energy security is a core element of India's foreign and economic policy. India is the world's third-largest oil importer and consumes approximately 5 million barrels per day. After Russia's invasion of Ukraine (February 2022), Russia offered heavily discounted crude — India increased its purchases from negligible levels (1-2% of imports) to roughly 40% of total crude imports by 2024-25, making Russia India's single largest crude supplier.
- India's crude oil import dependence: ~85% of total consumption is imported
- Pre-2022 Russia share: Less than 2% of India's oil imports
- Post-2022 Russia share: ~35-40% of India's total crude imports by 2024 (up to ~1.71 mbd in 2025)
- Key reasons for Russia preference: 10-15% discount to global benchmark; willingness to deal in non-dollar currencies
- India's other major crude suppliers: Iraq (~22%), Saudi Arabia (~18%), UAE, Kuwait
- Strategic Petroleum Reserve (SPR): India holds SPR at Padur, Mangaluru, and Visakhapatnam — combined capacity ~5.3 million tonnes; target to expand to 12 million tonnes
- India's stated policy: Sovereign right to purchase oil from any country at commercially viable terms; energy security is non-negotiable
Connection to this news: India's reduced Russian oil imports in February 2026 (1.16 mbd vs 1.71 mbd average in 2025) indicate that US pressure — even where legally constrained by the Supreme Court ruling — is already influencing India's sourcing decisions at the margin.
Key Facts & Data
- US Supreme Court ruling: Learning Resources Inc. v. Trump, February 20, 2026 (6-3 decision)
- IEEPA enacted: 1977; struck down as tariff authority by Supreme Court
- Secondary tariff on India: 25% additional (August 6, 2025 Executive Order); combined India tariff hit 50%
- IEEPA tariffs raised: Over $160 billion before the ruling
- India's Russian oil import (Feb 2026): 1.16 mbd — down from 1.71 mbd average in 2025
- US sanctions on Rosneft and Lukoil: October 22, 2025 (effective November 21, 2025)
- India's crude import dependence: ~85% of total consumption
- Russia's share of India's crude imports (post-2022): ~35-40%
- India's SPR capacity: ~5.3 million tonnes (Padur, Mangaluru, Visakhapatnam)
- Alternative tariff authorities: Section 301 (Trade Act 1974), Section 232 (Trade Expansion Act 1962) — NOT affected by Supreme Court ruling