Refunds from US 25% tariff rollback likely be limited

The additional 25 percent tariff on Indian exports was imposed by the United States in August 2025 tied to the country’s import of Russian crude oil, pushing effective duties on many goods to 50 percent.

• Indian exporters unlikely to get significant refunds after US tariff rollback
• Refunds, if any, go to US importers who may or may not pass them to exporters
• No clear process or timeline for claiming refunds after tariff removal

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Indian exporters are unlikely to see a significant refund after the United States rolled back the punitive 25 percent tariff, with sources indicating that the relief is likely to operate largely on a prospective basis even as clarity on the process remains limited.

The US Customs and Border Protection (CBP) department collects duties upfront from importers at the time goods enter the country. Any refund if permitted, would be paid to the American importer of record and not directly to Indian exporters.

“Importers have to get it first and then they will pass it on to exporters but there is still no clarity on how it will work,” one of the sources said.

Indian exporters will benefit only if importers pass on the refund.

The tariff rollback applies from February 7 but some duties may still be collected.

“The US importer pays upfront and only duties collected in that window could potentially be refunded,” the source said.

The White House order removing the additional duty, slapped for buying Russian oil, says Indian imports not be subject to the 25 percent tariff from February 7.

On refunds, it says, “…to the extent that implementation of this order requires a refund of duties collected, refunds shall be processed pursuant to applicable law and the standard procedures of US Customs and Border Protection.”

However, the order does not spell out timelines, eligibility criteria or the process for claiming refunds.

Anti-dumping versus reciprocal

A second source pointed out, unlike anti-dumping cases where provisional duties are often reversed and refunds follow a final determination, reciprocal or retaliatory tariffs imposed through executive action may not follow the same template.

“Usually, provisional duties are reversed and a subsequent decision is taken on refunds in anti-dumping cases. Whether the same will play out in the case of reciprocal tariffs remains to be seen,” this source said.

So far, there is no precedent in the US for automatic refunds after the rollback of reciprocal or retaliatory tariffs imposed by executive action.

Any recovery would likely depend on specific administrative guidance or a court ruling and may generally require companies to file claims.

In August, US President Donald Trump slapped an additional 25 percent tariff on Indian goods for buying Russian crude, pushing effective duties on many goods to 50 percent.

Under the interim trade framework agreed between India and the US in early February, the punitive additional tariff was rescinded, and overall reciprocal duties on Indian goods are expected to drop to 18 percent once American authorities issue an executive order, likely later this week.