Economic Security and Resilience Review
February 2026 brought into sharp focus three sets of developments with significant implications for India’s long-term economic security and strategic resilience. First, a legal verdict in the United States injected fresh uncertainty into the tariff landscape governing India-U.S. trade relations only a few days after a framework for an interim trade agreement was announced. Second, the highly successful AI Impact Summit held in New Delhi signalled India’s intent to shape emerging norms and partnerships in this frontier technology. Third, a series of coordinated moves on rare earths and critical minerals highlighted the government’s efforts towards ensuring supply chain security and access to strategic resources.
On the trade front, the U.S. Supreme Court’s February 20, 2026 ruling invalidating the Trump administration’s reciprocal tariffs imposed under the International Economic Emergency Powers Act (IEEPA) disrupted a wide array of bilateral trade arrangements negotiated over the past year, including understandings reached with India. In response, President Trump introduced an interim 10 % (which he has threatened to raise to 15 % but has not yet done so) additional tariff under Section 122 of the U.S. Trade Act on balance-of-payments grounds, applicable to most trading partners. At the same time, the U.S. administration is reportedly exploring alternative legal pathways to reinstate much of the earlier imposed tariff architecture.
This issue examines the range of scenarios that could emerge and their implications for India.
Earlier in the month - prior to the U.S. Supreme Court’s judgment - India and the United States had announced a joint framework agreement intended to culminate in an interim bilateral trade arrangement. Despite the legal setback, several core elements of that framework are likely to shape any eventual resolution of trade and tariff issues between the two countries. This issue analyses those elements in detail and identifies areas that may require recalibration, particularly as negotiations are expected to extend beyond tariffs to encompass non-tariff barriers, regulatory standards, and market access concerns.
February also witnessed an important consolidation of India’s technological diplomacy. The AI Impact Summit held in New Delhi culminated in a Delhi Declaration endorsed by 89 countries, including major global economies. The participation of multiple Heads of State and Government - including from France and Brazil - alongside leading global industry figures active in AI, reinforced the summit’s strategic significance. Announcements of major investment commitments by Indian businesses and launch of some locally developed large language models signalled that India is positioning itself not merely as a market for AI, but also as a shaping force in its governance and deployment.
Finally, developments in the critical minerals domain indicate India’s expanding engagement in efforts to reduce concentrated global dependencies. During the month, India formalised its participation in the U.S.-led Pax Silica initiative, and was included in FORGE (formerly the Minerals Security Partnership). The External Affairs Minister’s participation in the February 4 ministerial meeting on critical minerals in Washington D.C. further underlined India’s growing role in this space.
Bilateral memoranda of understanding and declarations of intent with France and Brazil on rare earths and critical minerals added to a widening network of strategic partnerships. The imperative now is implementation - ensuring that these frameworks translate into tangible supply diversification, investment in processing capabilities, and enduring technology upgrades.
To read this issue, please click ESRR, Vol. IV, Issue 2.
