Refund applications opened on April 20 through a new digital platform, CAPE (Consolidated Administration and Processing of Entries), operated by US Customs and Border Protection.
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The move follows a February 20, 2026 decision by the US Supreme Court, which struck down tariffs imposed during Donald Trump’s presidency, ruling they lacked proper legal authority under the International Emergency Economic Powers Act (IEEPA).
The now-invalidated duties, first introduced on April 2, 2025, had sharply raised costs for a wide range of imports, including a significant share of Indian exports. As per the report, estimates suggest that about $10–12 billion of the total refunds are linked to goods sourced from India.
However, the structure of the refund mechanism limits direct benefits for Indian firms.
Only US-based importers who paid the tariffs are eligible to file claims, leaving exporters without a legal pathway to recover these funds themselves. While refunds will include interest and are expected to be processed within 60 to 90 days, any trickle-down benefit to Indian companies will depend entirely on commercial arrangements.
“To get refunds, US importers must file detailed claims with shipment data, tariff lines and proof of payment. Approved claims, with interest, are expected within 60–90 days. Only those who paid the tariffs — mainly US importers and companies — can claim refunds,” the think tank said.
“Exporters and consumers cannot claim directly, though some firms like FedEx may choose to share refunds voluntarily,” it added.
While the tariffs were paid by US importers, their impact travelled up the supply chain. Indian exporters often responded by trimming prices or absorbing costs through reduced margins and contractual adjustments.
Tariff regime rose fast, and fell faster
The reciprocal tariff framework escalated quickly after its launch. Starting at 10% in April 2025, duties on Indian goods climbed to 25% by August 7 and then surged to 50% by August 28, where they remained until early February 2026.
A brief de-escalation saw rates cut to 18% on February 6 following negotiations. But within weeks, the Supreme Court ruling invalidated the entire structure, rendering the tariffs void and triggering the current refund process.
India’s exposure concentrated in key sectors
More than half — around 53% — of India’s exports to the US were affected, particularly in labour-intensive industries such as textiles and apparel, as per the GTRI report.
These sectors are expected to account for roughly $4 billion of the India-linked refunds. Engineering goods may contribute a similar amount, while chemicals could account for about $2 billion, with smaller shares spread across other categories.
Yet the absence of a direct claim route for exporters complicates the picture. Payments will flow exclusively to US importers, meaning Indian firms must rely on negotiations to capture any share of the refunded duties.
Negotiation will decide outcomes
For Indian exporters, the opportunity lies less in policy support and more in deal-making. Companies that had priced contracts on a duty-paid basis may have a case to renegotiate terms with US buyers.
Options include seeking partial rebate-sharing, revising prices, issuing credit notes, or restructuring future contracts to reflect the removal of tariff costs.
Exporters with stronger leverage, particularly in sectors like textiles and engineering goods, may be better positioned to secure favourable terms, either through immediate settlements or improved pricing in future orders.
“Exporters with stronger bargaining power, especially in textiles and engineering goods, may secure better terms in future orders. They can also take help from bodies like the Apparel Export Promotion Council, Engineering Export Promotion Council of India and Chemexcil for guidance on renegotiating contracts and sector-specific strategies,” it said.
The development opens a window of opportunity, but not a guaranteed payout. For India, the outcome will ultimately depend on how effectively exporters can convert a legal reset in the US into commercial gains.