$1 Billion and Counting: Indian Exporters Begin Receiving US Tariff Refunds

Indian exporters have started recovering more than $1 billion in tariff refunds after the US Customs and Border Protection (CBP) initiated reimbursements for duties collected under the now-invalidated tariff regime imposed by the Trump administration, according to people familiar with the matter.

A global consultant involved in multiple refund claims and a senior trade body executive confirmed the development, while exporters from the textile and seafood sectors told Moneycontrol that payments have begun reaching them.

The refunds stem from a landmark US Supreme Court ruling on February 20, 2026, which held that President Donald Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful.

The court ruled that the Constitution grants Congress—not the President—the authority to impose tariffs and directed that duties collected under the invalidated framework be returned.

Key Export Sectors Stand to Benefit

The ruling is expected to provide relief to several export-oriented industries that were hit by the additional US duties.

During the period the tariffs remained in force, India exported goods worth nearly $72 billion to the US, according to reports. Among the hardest-hit sectors were frozen seafood, with exports worth nearly $2 billion, and textiles, which shipped goods valued at over $1 billion.

The tariffs, first introduced in April 2025, imposed an additional 26% duty on Indian exports before being raised to as much as 50% on several product categories in August 2025, affecting competitiveness and squeezing exporters' margins.

How the Refund Process Works

Under CBP rules, refunds are issued only to the Importer of Record in the US—the entity that originally paid the duties at customs. Indian exporters cannot directly seek reimbursement and instead depend on their US buyers to transfer the refunded amount.

According to CBP data, the agency had processed $71 billion in tariff refunds globally as of June 29, although it has not disclosed country-wise figures.

Ranjeet Mahtani, Partner at Dhruva Advisors, said the commencement of refunds marks a significant milestone following the Supreme Court's decision, while EY Partner Saurabh Agarwal noted that CBP's guidance has clarified the claims process and indicated that eligible refund applications are generally expected to be processed within about 90 days.

Recovery Depends on Commercial Agreements

Industry executives cautioned that reimbursements are unlikely to be uniform because US importers are under no legal obligation to pass on the refunded duties to Indian suppliers.

A senior executive at an Indian trade body said recoveries depend largely on longstanding commercial relationships and the contractual arrangement governing who ultimately bore the tariff burden.

In some transactions, Indian exporters absorbed the additional duties, while in others the costs were shared with US importers.

Rahul Shekhar, Partner – Indirect Tax at Nangia Global, advised businesses to ensure refund claims are backed by complete documentation, accurate customs declarations and genuine import records, warning that the process is likely to face heightened scrutiny from US customs authorities.