Indian exporters whose goods were subject to reciprocal and penal tariffs of about $12 billion in the US market can hope to get a portion of it back as the US Customs and Border Protection (CBP) has started accepting applications for refunds.
The refunds will be issued only to importers on record and authorised customs brokers with a US bank account.
Any gain from the refund process for Indian exporters would depend on the way they structured their transactions when between April and August last year. The US increased additional tariffs on India, starting from10% in April to 50% by August.
“About 53% of India’s exports to the US — mainly textiles and apparel — faced these high tariffs, making them the biggest contributors to refunds. Of the estimated $12 billion linked to India, textiles and apparel may account for about $4 billion, engineering goods another $4 billion, and chemicals about $2 billion, with smaller shares from other sectors,” Founder of Global Trade Research Initiative (GTRI) Ajay Srivastava said.
What did Ajay Sahai say?
Refunds can flow to Indian exporters if they would have reached an understanding with their buyers on sharing the tariff burden by offering heavy discounts with an understanding of adjustment in the future, Director General and CEO of the Federation of Indian Export Organisations (FIEO) Ajay Sahai said. He, however, did not quantify the amount of refunds Indian exporters can expect.
“In cases where the US import duties were shared between buyers and sellers some compensation can be expected. The buyer is, however, unlikely to remit the money directly but can make adjustments against future orders,” Chairman of Engineering Export Promotion Council (EEPC) Pankaj Chadha said.
The importers are most likely to share their refunds with exporters with whom they enjoy continuing relationships. One-off suppliers may find themselves cut out, he added. In many cases larger Indian companies are importers on record in the US. Their US offices import from India to sell in the US so they too would be eligible for refunds, Chadha said.
In sectors including steel, gems and jewellery, textiles and even handicrafts this trend is seen. The refunds follow a February 20 ruling by the US Supreme Court, declaring the tariffs as illegal. The total tariff refund is about $166 billion.
Even exports on delivered duty paid (DDP) basis can claim a share of tariff refund, Sahai said. In DDP the seller covers shipping, customs clearance, duties, and taxes. The taxes are paid through a clearing agency and under CBP rules even they are eligible to claim a refund.
“The clearing agent in these cases can collect the refund and pass it on to the seller as the duty was also paid through the agent,” the FIEO DG said. Indian exports to the US faced 50% tariffs between August 28, 2025 and early February 2026.
On February 6, it was announced through an India-US joint statement that tariffs on India would be reduced to 18% from 50%. But before this could fully take effect, the Supreme Court ruling invalidated the entire framework.