NEW DELHI : Several Indian Exporters are beginning to recover duties paid under the Trump administration’s tariff regime, with more than $1 billion in refunds already reaching exporters across sectors such as textiles, gems and jewellery, and seafood after the US Customs and Border Protection (CBP) started processing reimbursements, said two people with direct knowledge of the matter including a global consultant who handled several such refunds and a senior executive of a trade body.
At least two Indian exporters—a textile exporter and a seafood exporter—confirmed to Moneycontrol that reimbursements had begun coming through.
The refunds follow a landmark ruling by the US Supreme Court, which on February 20, 2026, held that President Donald Trump’s global tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful.
The court ruled that the IEEPA does not give the President unilateral authority to impose tariffs, observing that the constitutional power to levy taxes and regulate international trade rests with Congress. It subsequently directed that duties collected under the invalidated tariff regime be refunded.
The development is significant for Indian exporters, who shipped goods worth nearly $72 billion to the United States during the period the tariffs were in force, according to data compiled by Moneycontrol. Frozen seafood exports accounted for nearly $2 billion, while textile exports exceeded $1 billion, making these among the sectors most affected by the additional duties.
The tariffs were first imposed by the Trump administration in April 2025 under emergency powers, with Indian exports initially facing an additional tariff of 26%. In August 2025, duties on several Indian-origin products were increased to as much as 50%, sharply affecting export competitiveness and squeezing margins across multiple industries.
Refund Process
According to CBP rules, refunds are made only to the Importer of Record in the United States—the registered importer that originally paid the duties. The Indian exporter cannot directly claim the refund and instead relies on the US importer to pass on the recovered amount. CBP data shows the agency had processed $71 billion in tariff refunds globally as of June 29, although it does not disclose country-wise figures.
“The initiation of the tariff refund process by the U.S. Customs authorities marks a milestone development for global trade, just as the imposition of tariffs by the Trump administration did,” said Ranjeet Mahtani, Partner at Dhruva Advisors. “Following the Supreme Court verdict, CBP has initiated the process of issuing refunds of duties collected under the invalidated tariff regime, and several importers have reportedly started receiving refunds,” he said.
To claim the refunds, the importer must identify eligible import transactions where duties were paid and submit the required documentation to CBP.
“With the U.S. CBP having already processed around $35.46 billion, including interest, in refunds, the IEEPA duty refund programme has become a significant opportunity for businesses that paid these tariffs,” said Saurabh Agarwal, Partner at EY. “The guidance issued by CBP brings much-needed clarity by outlining the different categories of refund claims and indicating that accepted claims are generally expected to be processed within about 90 days.”
Refunds depend on importer relationships
While the refund process has begun, industry executives said Indian exporters are not receiving payments uniformly because the refunds legally belong to the US importer.
A senior executive at a leading Indian trade body said the extent of recovery depended entirely on commercial arrangements between exporters and their American buyers.
“Technically, Indian exporters have no legal right in the U.S. to claim the refund. The claim has to be initiated by the importer on record for the transaction,” the executive said. “There is no legal obligation on the US importer to reimburse the Indian exporter. However, because many of these relationships have existed for years, several importers have started passing on the benefits.”
Industry executives added that refund amounts also vary depending on how tariff costs were originally shared. In some cases, Indian exporters absorbed the entire burden of the tariffs, while in others the costs were shared between exporters and importers under negotiated commercial arrangements.
Rahul Shekhar, Partner – Indirect Tax at Nangia Global, said businesses should exercise caution while filing refund claims.
“Businesses seeking refunds of U.S. tariffs should exercise caution, as the refund process is likely to be subject to heightened scrutiny by U.S. Customs and Border Protection,” he said. “Refund claims should be filed only by the lawful Importer of Record or authorised customs broker and must be supported by accurate customs declarations, genuine import entries and complete documentation.”
For many Indian exporters, the refunds provide an unexpected boost to cash flows after months of absorbing elevated duties. However, because the money must first flow through US importers, the speed and extent of recovery will continue to depend as much on commercial relationships as on the refund process itself.
Data shows that actual trade in commodities rose 5.77 percent to $72.4 billion during April-January 2026 from $68.5 billion a year earlier despite tariffs. Electrical machinery and equipment, which includes smartphones, nearly doubled to $20.9 billion from $11 billion, while machinery and mechanical appliances rose 9.03 percent to $6 billion. Jewellery trade was the fourth largest export from India despite halving to $4.2 billion. In contrast, textiles and apparel showed visible weakness despite their large scale in the trade basket. Other made-up textile articles fell 9.12 percent but will still significant at $2.2 billion, knitted apparel declined 7.9 percent to $2.04 billion, and non-knitted apparel slipped 3.6 percent to $2.0 billion. Carpets and textile floor coverings were down to $917.30 million.
Source : Moneycontrol
