The Joe Biden administration has initiated the process of refunding the substantial tariffs imposed on imported goods during Donald Trump’s tenure in the United States. Following the US Supreme Court’s declaration that these tariffs were unlawful, the path has been cleared for refunds totaling approximately $166 billion. According to a report by the Global Trade Research Initiative (GTRI), roughly $10 to $12 billion of this colossal sum is linked to India. However, due to legal complexities, doubts have emerged regarding whether this money will actually find its way directly into the pockets of Indian exporters.

The Key to Refunds Lies with US Importers

US Customs and Border Protection has launched a digital platform named ‘CAPE’ to facilitate these refunds. Under the regulations, the legal entitlement to claim this money rests solely with the US entities that originally paid the tariffs at the time of importation. Since Indian exporters did not pay these duties directly, it is impossible for them to recover these funds without the cooperation of their US buyers. It has been reported that these refunds—comprising both the principal amount and accrued interest—are expected to be disbursed within the next 60 to 90 days.

Apparel and Engineering Sectors Hit Hardest

Between 2018 and 2025, as a result of Trump’s tariff policies, duties on Indian goods escalated in a phased manner, rising from 10 percent to as high as 50 percent. Consequently, businesses across the textile, engineering goods, and chemical sectors faced severe financial losses. Statistics reveal that out of India’s total potential refund amount, $4 billion belongs to the apparel industry, with an equivalent sum attributed to the engineering sector. In their bid to retain market share, many companies were compelled to sell their products at reduced profit margins.

The Path to Recovery Lies in Negotiation

Indian companies must now renegotiate their business agreements with their US buyers. Although they lack the direct legal standing to claim these funds through formal litigation, exporters can attempt to recover the money through mechanisms such as adjustments on future orders or the issuance of credit notes. Organizations such as the AEPC and EEPC can play a crucial role in this process. If U.S. buyers are unwilling to share a portion of these refunds, it will be impossible for Indian firms to recover their losses.

At a Glance

India has a stake of $10–12 billion in the U.S.’s $166 billion refund process.

Instead of Indian exporters, U.S. importing firms will receive these refunds directly.

Businesses in the textile and engineering sectors stand to benefit the most from this process.

To receive the funds, Indian firms will need to engage in commercial negotiations with their U.S. buyers.