The repatriation process for over $10 billion in US reciprocal tariff refunds has started moving for Indian exporters, following detailed administrative instructions from US Customs and Border Protection (CBP) and a key regulatory clarification by the Reserve Bank of India (RBI) to streamline the inflows.

Cross-border digital payment gateways have also stepped in, offering to route the refunds without opening foreign accounts at a fraction of standard commercial banking costs, a source tracking the matter told businessline.

However, exporters who paid the duties through freight forwarders face an additional hurdle. Because the forwarders acted as the legal importer of record, they will receive the refunds directly from the US treasury and must subsequently route it to the exporters in compliance with the rules. These nitty-gritties are being worked out, the source said.

In transactions where duties were paid directly by US importers, the importing entity will receive the refund. However, because many Indian exporters initially offered steep discounts to share the tariff burden, expectations are that the refunds will be shared too. “Now it depends on the mechanics that the two work out for sharing, which will differ case-to-case,” the source noted.

“The systems are falling into place. Things got delayed as US Customs took time issuing administrative guidelines. Now that it is done, small amounts have been remitted in some cases. But no big amounts have been sent so far. It will happen gradually,” the source noted.

The refunds stem from a sweeping trade enforcement action in April 2025, when Washington invoked the International Emergency Economic Powers Act (IEEPA)  to penalise nations holding trade surpluses with the US.

India was hit with 25 per cent reciprocal tariff on August 7, 2025, followed by another 25 per cent penalty on August 27 over its crude oil imports from Russia.

The dual levies resulted in a 50 per cent tax on key Indian exports like textiles, engineering goods, leather, and jewelry before the US Supreme Court struck down the duties as unconstitutional on February 20, 2026.  

“According to various estimates, refunds of over $10 billion are due for Indian exports made between August 2025 and February 2026,” the source said.

To resolve banking bottlenecks for entitled exporters, the RBI clarified that Indian banks lacking direct US correspondent networks can set up specialised collection accounts through any bank with an operational US branch.

“There are a few domestic banks without a corresponding bank or branches in the US, creating a problem regarding where the duties would get refunded. The RBI’s clarification addresses this,” the source said, adding that the exact procedure is now being communicated to exporters.

Published on June 14, 2026