The US $12 Billion Tariff Refund Window Opens: What Indian Exporters Must Do

An Indian garment manufacturer in Tirupur spent ten months adjusting to the impossible. When the United States imposed a 26 percent reciprocal tariff on Indian goods in April 2025, then stacked a 25 percent punitive levy on top of it for India's oil purchases from Russia, the combined rate reached 50 percent on knitted garments by August 2025. Combined with pre-existing MFN duties, the total tariff wall on some product lines crossed 63 percent. Orders held. Margins collapsed. Some buyers renegotiated contracts. Others simply went quiet.

Then, on February 20, 2026, the United States Supreme Court issued its ruling in Learning Resources, Inc. v. Trump, consolidated with Trump v. V.O.S. Selections, Inc., and the entire structure of those tariffs was declared unconstitutional. The Court held, 6-3, that the International Emergency Economic Powers Act (IEEPA) does not grant the President authority to impose tariffs, because tariff authority is a taxing power reserved exclusively to Congress under Article I of the US Constitution. Chief Justice John G. Roberts authored the opinion, joined by Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson. The IEEPA tariffs, all of them, were legally void from the date they were imposed.

What followed was a $166 billion problem for US Customs and Border Protection. Between April 2025 and February 2026, CBP had collected those duties across more than 53 million import entries from over 330,000 US importers. Processing refunds entry-by-entry, under existing CBP procedures, would have required an estimated 4.4 million working hours. The US Court of International Trade, under Judge Richard K. Eaton, ordered CBP to develop a scalable refund mechanism. CBP requested and received a 45-day extension. The result is CAPE, the Consolidated Administration and Processing of Entries portal, which went live inside the ACE Secure Data Portal at 8:00 AM Eastern Time on April 20, 2026.

For India, this number is not abstract. According to analysis by the Global Trade Research Initiative (GTRI), roughly $10-12 billion of the $166 billion in refunds is linked to goods originating in India. Textiles and apparel account for an estimated $4 billion of that. Engineering goods account for another $4 billion. Chemicals contribute approximately $2 billion, with smaller amounts from other sectors. These are significant sums for exporters who absorbed the cost of those tariffs for the better part of a year.

Here is the structural problem: India's exporters cannot file for a single rupee of those refunds. The CAPE system issues refunds exclusively to US importers of record, and only to the licensed customs broker who originally filed the entry. Indian exporters have no legal standing in the CAPE process. The only way an Indian exporter recovers any share of what was lost is by approaching the American buyer, having a direct and documented conversation about the refund, and negotiating an allocation before that buyer files its declaration, pockets the refund, and moves on.

The portal has been live for 48 hours. Refunds are expected to be issued within 60 to 90 days of declaration acceptance. There is no legal obligation on any US importer to share a single dollar with its Indian supplier. This article explains the legal architecture, the sector exposure, the negotiating framework, and the precise steps an Indian exporter must take to convert a court ruling into recovered margin.

The Legal Architecture Tariff Refund: How US Supreme Court Ruling Became a Refund Portal

The IEEPA tariffs that triggered this entire chain of events were not a gradual policy development. They arrived suddenly and at scale. On April 2, 2025, President Trump invoked the International Emergency Economic Powers Act to impose reciprocal tariffs on imports from almost every country. For India, the initial rate was 26 percent, framed as a response to the US trade deficit and what the administration characterised as non-reciprocal trade practices by India.

India's position became significantly more complex in July 2025. The administration imposed an additional 25 percent tariff targeting countries that continued to purchase oil from Russia under US sanctions. India, the world's third-largest oil importer and a significant buyer of Russian crude through Rosneft and Lukoil, was specifically targeted. By August 7, 2025, the combined IEEPA rate on Indian goods had reached 25 percent. By August 28, 2025, with the full Russia oil penalty in effect, the combined IEEPA rate stood at 50 percent. No other major trading partner faced this compounded structure. China, Turkey, and several other Russian oil buyers were not subjected to the secondary tariff.

Parallel legal challenges to the IEEPA tariff authority were proceeding through the federal courts throughout this period. The US Court of International Trade ruled in May 2025 that the tariffs were unlawful. The Federal Circuit upheld that ruling in August 2025. The Supreme Court granted certiorari in September 2025, heard oral arguments on November 5, 2025, and issued its ruling on February 20, 2026. The President issued an executive order titled 'Ending Certain Tariff Actions' on the same day. CBP stopped collecting IEEPA duties effective February 24, 2026.

The CAPE system was built not by policy choice but by court order. CBP estimated that processing these refunds through existing procedures would require 4.4 million working hours. The Court of International Trade gave them 45 days to design a better system.

-SpheraLink Ventures 360 Editorial Observation, April 2026

The CIT then ordered CBP to develop a centralised refund mechanism. CBP's CAPE system was built within that court-ordered timeline. It operates inside ACE, the Automated Commercial Environment that US importers already use for all customs filings. CAPE Phase 1, which launched April 20, 2026, accepts refund requests for two categories of entries: unliquidated entries, and entries within 80 days of liquidation (to allow reliquidation within CBP's 90-day voluntary reliquidation window under 19 U.S.C. Section 1501). Entries involving drawback claims, open protests, reconciliation, or certain antidumping and countervailing duty proceedings are not included in Phase 1. CBP has confirmed that additional phases will follow, though no timeline for those has been announced.

The filing mechanism is straightforward for the importer. The IOR or its licensed customs broker logs into the ACE Portal, navigates to the new CAPE tab, and uploads a comma-separated values (CSV) file containing entry summary numbers. CBP removes the IEEPA HTS Chapter 99 code from each entry, recalculates duties owed without the IEEPA component, and issues a refund including statutory interest. Refunds are consolidated by IOR and issued electronically via ACH to the bank account on file. CBP has indicated that valid refunds will generally be issued within 60 to 90 days of declaration acceptance.

As of April 9, 2026, more than 56,000 US importers had already completed ACH registration and were eligible for refunds totalling an estimated $127 billion, representing approximately 82 percent of total IEEPA duties collected. The portal had a bumpy start, with some importers reporting technical glitches in the initial hours. The scale of the exercise is unprecedented: this is the first time in modern US customs history that a court-ordered reversal of tariff collections has been executed at this volume and speed.

KEY NUMBERS: THE CAPE REFUND FRAMEWORK (APRIL 2026)
Total IEEPA duties collected	~$166 billion (April 2025 - February 2026)
US importers covered	330,000+ across 53 million shipment entries
Importers ACH-registered (as of April 9)	56,497 importers, eligible for ~$127 billion
Phase 1 coverage	~82% of IEEPA duty payments (~$127 billion)
Refund processing timeline	60-90 days from acceptance of CAPE Declaration
India-linked goods (estimated)	$10-12 billion of the total refund pool
Phase 1 exclusions	Drawback claims, open protests, reconciliation, some AD/CVD entries
CAPE Declaration format	CSV file upload; max 9,999 entry numbers per declaration

India's Exposure: Which Sectors Are Carrying the $10-12 Billion?

India exported goods worth approximately $86.5 billion to the United States in FY 2024-25, making the US its largest single export market. Engineering goods, textiles and apparel, gems and jewellery, pharmaceuticals, and chemicals collectively account for the overwhelming majority of that value. The IEEPA tariffs, which went from 0 to 26 percent overnight in April 2025 and then to 50 percent by August 2025, directly impacted approximately 53 percent of India's total US export value, according to GTRI analysis.

The sector breakdown of India's estimated $10-12 billion in IEEPA-related refunds is not uniform. Textiles and apparel, India's most labour-intensive export category to the US, are expected to account for roughly $4 billion. Before the tariffs, knitted garments faced MFN duties in the range of 12 to 32 percent. The IEEPA reciprocal tariff added 26 percent, and the Russia oil penalty added 25 percent more, pushing combined rates for some product lines past 63 percent. For a sector that employs approximately 45 million workers directly and depends heavily on US buyers for premium segments, this was not an abstract policy problem.

Sector Exposure Breakdown

Engineering goods represent the second major tranche of India's refund exposure. India's engineering exports to the US were valued at approximately $19.16 billion in FY 2024-25, representing about 16 percent of India's total engineering export base of $116.67 billion. Auto parts, forgings, industrial machinery, and power equipment sit within this category. GTRI estimates that engineering goods may account for another $4 billion in India-linked IEEPA refunds.

Chemicals contributed approximately $2 billion to the refund pool. India's organic chemicals exports to the US, while smaller in absolute value than textiles or engineering goods, faced the same 50 percent IEEPA rate and represent a meaningful base for recovery. Marine products, leather goods, and gems and jewellery each account for smaller but non-trivial amounts.

One sector that sits in a structurally unusual position is Indian shrimp. Indian seafood exporters, particularly those that sell under Delivered Duty Paid (DDP) incoterms to US buyers, were themselves the importers of record for those shipments, meaning they bear legal responsibility under US customs law for the tariffs paid. Indian shrimp exporters have filed lawsuits at the US Court of International Trade specifically to preserve their right to claim IEEPA refunds as IORs. Over $448.4 million in IEEPA tariffs were collected on Indian shrimp imports alone between May 2025 and February 2026, compared to just $76.8 million collected on shrimp from all countries in the entire preceding decade from 2015 to 2024.

The table below maps India's key US export sectors against estimated IEEPA tariff exposure and the refund category into which they fall.

Sector	India-US Export Value (FY25)	Combined IEEPA Rate (Peak)	Est. India Refund Exposure	IOR Situation
Textiles & Apparel	~$10.3 billion	50-63% (incl. MFN)	~$4 billion	US buyer typically IOR
Engineering Goods	~$19.16 billion (US share)	50% IEEPA + 25% S.232 (steel)	~$4 billion	US buyer typically IOR
Organic Chemicals	~$2.34 billion (US-bound)	50%	~$2 billion	US buyer typically IOR
Marine Products (Shrimp)	~$2 billion+	50%	~$448 million+ (shrimp alone)	Indian exporter often IOR (DDP)
Gems & Jewellery	~$25.73 billion total / ~33% to US	50%	Smaller share	US buyer typically IOR
Leather & Footwear	~$1.18 billion (US-bound)	50%	Smaller share	US buyer typically IOR

The Structural Problem: Why Indian Exporters Cannot File Directly

The CAPE portal is not accessible to Indian exporters. This is not a bureaucratic oversight. It is a function of how US customs law is structured. Under US law, the importer of record (IOR) is the party legally responsible for a shipment's entry into the United States, including payment of applicable duties. In the vast majority of trade transactions involving Indian goods, the IOR is the American buyer or its designated customs broker. The US buyer registered the entry, paid the duties, and holds the ACE portal account. CAPE refunds go exclusively to that IOR.

The only exception applies to Indian exporters that shipped goods under Delivered Duty Paid (DDP) incoterms. Under DDP, the seller assumes responsibility for import clearance, including duty payment, which often makes the seller (or its agent) the IOR. For those exporters, a direct legal path exists through the CAPE portal, though accessing it requires having or establishing an ACE Secure Data Portal account with a US bank account and address. The Indian shrimp sector is the clearest example of this structure in action: many shrimp processors in Andhra Pradesh and Tamil Nadu ship DDP to US retailers and restaurant chains, making them IORs and allowing them to file CAPE declarations directly.

For the far larger majority of Indian exporters who sold on FOB, CIF, or CFR terms, there is no direct route. The refund flows to the American buyer. What happens to it after that depends entirely on the commercial relationship, the contractual terms in place at the time of shipment, and what the exporter is willing to negotiate for.

IF YOU SHIPPED DDP, YOU MAY HAVE A DIRECT PATH

Check your incoterms on all US-bound shipment documentation from April 2025 to February 2026.

If you shipped DDP and your company (or freight agent) was listed as the IOR on the US CBP Form 7501, you may be eligible to file CAPE declarations directly.

You will need an ACE Secure Data Portal account with a US-based bank account and a US address. Engage a licensed US customs broker to assist with this process.

Indian shrimp exporters who shipped DDP have already filed lawsuits at the US Court of International Trade to preserve this right. If you are in this category and have not taken legal steps, consult a US customs attorney immediately.

Even if you shipped DDP, the administration has signalled it may contest refunds. Filing early and having all documentation in order is essential.

For exporters who did not ship DDP, the path runs through negotiation. How effective that negotiation is depends on several factors: the speed with which the exporter approaches the buyer, the documentation trail showing who actually bore the tariff cost, the strength of the commercial relationship, and the exporter's leverage in the account.

THE KEY QUESTION THAT DETERMINES YOUR NEGOTIATING POSITION

Before approaching your buyer, establish one critical fact: who actually bore the tariff cost in this transaction?

If your buyer renegotiated the purchase price downward after the tariffs were imposed, or if you reduced your invoice price to absorb the tariff impact, you have a documented argument that the tariff cost was shared or shifted to you.

If your buyer paid the full original invoice price and absorbed the duty entirely at the US end, your negotiating argument is weaker - though you may still argue that the tariff impacted order volumes and future pricing.

If your contract or correspondence shows that you explicitly 'shared' the tariff burden through a price reduction or delayed payment, document this thoroughly before you open the conversation.

The Negotiating Window: What It Is, Why It Is Closing, and What to Do

The CAPE portal opened April 20, 2026. Refunds are expected to be issued within 60 to 90 days of declaration acceptance. An American buyer that files its CAPE declaration this week could receive its refund check as early as mid-June to mid-July 2026. Once that refund is received, the importer has the money. There is no legal mechanism that compels them to pass any of it to their Indian suppliers after the fact. The negotiating window is the period between now and the moment the buyer files its declaration or receives its refund.

The practical urgency is compounded by the fact that Phase 1 of CAPE is limited to unliquidated entries and entries within 80 days of liquidation. The 80-day counter is already running. For entries that were liquidated in early February 2026, the 80-day window closes in late April 2026. As more entries move outside this window, they fall into Phase 2 of CAPE, for which CBP has provided no timeline. This creates a natural incentive for US buyers to file quickly, which further compresses the window for Indian exporters to engage.

Payments go only to US importers, and exporters have no legal right to claim them. Any recovery will depend on commercial negotiation.

Ajay Srivastava, Founder, Global Trade Research Initiative (GTRI), April 21, 2026

The approach an Indian exporter takes to this negotiation matters. Arriving unprepared, or with a vague claim that the tariffs 'hurt our business,' will produce nothing. The buyer knows its refund amount precisely because ACE has all the entry data. The exporter needs to arrive with an equally precise understanding of what is on the table.

Step 1: Reconstruct the Tariff Impact on Your Shipments

Before contacting the buyer, calculate the IEEPA tariff that was paid on each shipment for which you want to claim a share. This requires knowing the HS code of each shipment, the invoice value, the date of entry into the US, and the IEEPA tariff rate in effect on that date. IEEPA rates for India increased in stages: 26 percent from April 2025, rising further with the Russia oil penalty through August 2025. Request copies of entry summaries (CBP Form 7501) from your buyer or freight forwarder. These documents will show the precise duty paid on each entry.

Step 2: Identify Which Shipments Had the Tariff Cost Shared With You

Review all email correspondence, revised purchase orders, and any price-adjustment memos from the tariff period. If your buyer reduced its purchase price from you, or if you issued a credit note to offset the tariff impact, this creates a documented commercial argument that you bore some portion of the duty cost. Compile this evidence. It forms the factual basis of your claim.

Step 3: Calculate Your Claim

A reasonable starting position is to claim a share of the IEEPA refund proportional to the share of the tariff cost you demonstrably bore. If your price was reduced by 10 percent on shipments where the IEEPA tariff was 26 percent, the exporter's share of the 26 percent tariff cost is roughly 38 percent. The conversation is then about what percentage of the buyer's IEEPA refund, on those specific entries, should be credited or rebated to your account.

Step 4: Approach the Buyer Before They File

Contact your key US buyers immediately. Do not wait for them to receive their refund and then raise the issue. Frame the conversation around your shared commercial history, the documented impact of the tariffs on your business, and a specific, calculated proposal. Suggest a structure: either a direct credit note from the buyer, an adjustment in future pricing, or a rebate against open invoices. Most buyers will not volunteer to share refunds they have no legal obligation to share. But many buyers, particularly those with long-term supplier relationships, will negotiate if approached properly before the money lands in their bank account.

MISTAKES THAT WILL COST YOU THE NEGOTIATION

Waiting until the refund has been issued to raise the issue. Once the money is received, the buyer's incentive to negotiate disappears.

Approaching the buyer without a specific, documented calculation. Vague claims of 'shared tariff burden' will be dismissed. Arrive with entry-level data.

Demanding a full refund when the buyer absorbed some or all of the tariff cost. This destroys the relationship and produces nothing.

Confusing IEEPA refunds with Section 232 (steel/aluminium) or Section 301 (China goods) duties. Those are not included in CAPE and are not being refunded.

Assuming that the existing 10% Section 122 tariff will also be refunded. It will not. Section 122 is a different legal authority, still in force, and not part of the IEEPA ruling.

Failing to document the negotiation outcome in writing. Any agreed rebate or credit must be confirmed via email or a formal amendment to your contract.

The DDP Exception: Indian Exporters Who Can File Directly

A distinct category of Indian exporters sits in a fundamentally different legal position: those who shipped goods to the United States under Delivered Duty Paid (DDP) incoterms. Under DDP, the seller is responsible for delivery at the named destination inclusive of all import duties and clearance costs. In practice, the seller or its appointed freight agent typically acts as the non-resident importer of record for US customs purposes.

For these exporters, the refund legally belongs to the IOR. If an Indian exporter is registered as the IOR on the original CBP Form 7501, it can, in principle, file a CAPE declaration directly through the ACE Secure Data Portal and receive the refund. This requires the exporter to have or establish an ACE Secure Data Portal account with a valid US bank account (for ACH refund deposit) and a US address on file. This is not a trivial exercise for a company without a US corporate presence, but it is legally achievable through a licensed US customs broker with power of attorney.

The Indian seafood sector, particularly shrimp processors, is the clearest illustration of this pathway. Many large Indian aquaculture and processing companies sell directly to US retailers and restaurant chains under DDP terms, handling all US import clearance through their appointed freight agents. Over $448.4 million in IEEPA tariffs were collected on Indian shrimp imports alone between May 2025 and February 2026. Indian shrimp exporters have already filed protective lawsuits at the US Court of International Trade to preserve their refund rights while the CAPE process plays out.

The table below summarises the eligibility framework for Indian exporters based on incoterm and IOR status.

Incoterm Used	Typical IOR	Direct CAPE Access?	Required Steps for Indian Exporter	Timeline Consideration
DDP (Delivered Duty Paid)	Indian exporter or agent	Yes, if exporter was listed as IOR on CBP Form 7501	Establish ACE account; enrol in ACH; engage US customs broker	Urgent: file before 80-day liquidation window closes
FOB / CIF / CFR	US buyer	No	Negotiate with US buyer for rebate/credit share	Approach buyer before CAPE declaration is filed
DAP (Delivered at Place)	US buyer	No	Negotiate with US buyer	Same urgency as FOB/CIF
FCA (Free Carrier)	US buyer	No	Negotiate with US buyer	Same urgency as FOB/CIF
EXW (Ex Works)	US buyer (or forwarder)	No	Negotiate with US buyer	Same urgency as FOB/CIF

BLUE: HOW TO ESTABLISH ACE PORTAL ACCESS IF YOU ARE A DDP EXPORTER

Step 1: Determine if your company was listed as the IOR on CBP Form 7501 for the relevant shipments. Obtain copies of these forms from your US freight agent.

Step 2: Engage a licensed US customs broker (a '4811 designee' under CBP Form 4811) to act on your behalf for the CAPE filing. This broker must have an ACE account.

Step 3: If you do not already have an ACE Importer sub-account, apply at the CBP ACE Portal website. You will need a US bank account for ACH refund receipt and a US address. Your customs broker or a US-registered subsidiary can hold these.

Step 4: Compile the list of entry summary numbers (CBP Form 7501 reference numbers) for all IEEPA-affected entries where you were the IOR. This becomes your CAPE Declaration CSV file.

Step 5: Review all entries for compliance issues before filing. CBP has clarified that filers must certify compliance across all entries included in a declaration. Do not include entries where there are known valuation disputes or customs violations.

Note: The administration has signalled it may aggressively contest some refund claims. File a protective lawsuit at the CIT in parallel if the amounts are significant.

Sector-Specific Negotiating Context: What Each Industry Faces

Textiles and Apparel

India's textile and apparel exporters operate in a buyer-driven supply chain where US importers, particularly large retailers and brands, hold significant structural power. The standard arrangement is FOB or CIF from Indian ports, meaning the US buyer is the IOR and owns the duty liability. When IEEPA tariffs hit in April 2025, the response varied: some buyers absorbed the tariff to preserve the supply chain; others renegotiated purchase prices downward; and some cancelled or reduced orders entirely.

For exporters whose buyers renegotiated prices downward, there is a documented commercial case for claiming a share of the IEEPA refund proportional to the price reduction imposed. For those whose orders were cancelled or reduced, the negotiating argument is less direct, but tariff-driven order disruption can still be part of a broader commercial discussion about future pricing and volume commitments.

An important competitive context: following the SCOTUS ruling, India's effective US tariff rate dropped to the Section 122 rate of 10 percent, which applies uniformly to most countries including Vietnam. This creates a level competitive playing field for Indian textiles against Vietnam and Bangladesh for the first time since Liberation Day. US buyers who shifted sourcing to Bangladesh (37 percent original IEEPA rate) or Vietnam (46 percent original IEEPA rate) may now be reassessing. Indian exporters in a strong negotiating position can use the post-ruling tariff landscape as additional leverage.

Engineering Goods

Engineering goods present a more complex tariff picture. Section 232 tariffs of 25 percent on steel and aluminium remain in force and were not invalidated by the SCOTUS ruling on IEEPA. For Indian steel and auto component exporters, the refund relates only to the IEEPA component of the total duty, not the Section 232 component. An exporter needs to be precise about which tariff layer is being refunded. Misrepresenting the refundable amount to a US buyer will damage credibility and kill the negotiation.

For engineering goods that do not face Section 232 (industrial machinery, power equipment, precision parts), the situation is cleaner. The IEEPA tariff of 26 to 50 percent was the dominant tariff layer for most of FY 2025-26, and the entire IEEPA component is refundable. Engineering goods exporters typically have fewer buyers, deeper commercial relationships, and more sophisticated counterparts on the US side. These relationships often support more direct and documented negotiations.

Chemicals

India's organic chemicals exporters to the US account for approximately $2 billion of the India-linked IEEPA refund pool. This sector tends to operate on annual contract pricing with specialty chemicals buyers and distributors. The tariff impact was often documented through explicit contract renegotiations or force majeure notices. That documentation becomes valuable evidence in the refund-sharing conversation.

Marine Products and Shrimp

As discussed in Section V, Indian shrimp exporters who shipped DDP may have a direct legal claim to IEEPA refunds as IORs. The Southern Shrimp Alliance, representing US shrimpers, has noted that the IEEPA refunds will flow 'largely to the foreign exporters' who shipped under DDP terms, which it considers a windfall for Indian and other foreign competitors. This framing underscores that the DDP route is legally defensible, even if politically contested. Indian seafood exporters with DDP shipments should prioritise this route over commercial negotiation.

For Indian textiles, the post-ruling landscape is arguably better than the pre-tariff baseline. India now competes with Vietnam and Bangladesh at the same 10% Section 122 rate. The question is whether exporters are positioned to act on this advantage or are still managing the aftermath of the tariff period.

-SpheraLink Ventures 360 Editorial Observation, April 2026

The Broader Trade Context: Section 122, the India-US Interim Deal, and What Comes Next

The IEEPA ruling did not wipe all US tariffs from Indian goods. Several tariff layers survive and remain in force. Indian exporters need to understand the current tariff architecture clearly to avoid conflating what has been refunded with what remains.

Section 122 tariffs, imposed under a different statutory authority, currently apply to India at a rate of 10 percent. The SCOTUS ruling in Learning Resources did not affect Section 122. Steel and aluminium remain subject to Section 232 tariffs of 25 percent. Pharmaceutical products, which were exempt from the IEEPA reciprocal tariffs throughout the tariff period, continue to enter the US largely at MFN rates close to zero. The 10 percent Section 122 rate actually represents a better outcome than the 18 percent rate that was under negotiation in the US-India Interim Agreement before the SCOTUS ruling, meaning the constitutional challenge ultimately produced a better tariff outcome for India than the diplomatic track was on course to deliver.

India and the US continue to negotiate a broader trade framework. Commerce and Industry Minister Piyush Goyal visited Washington to advance negotiations, meeting with USTR Jamieson Greer and Commerce Secretary Howard Lutnick. The stated goal on the Indian side is to eliminate both the 26 percent original IEEPA reciprocal tariff (now refunded) and the 10 percent Section 122 baseline, seeking full tariff relief on labour-intensive sectors including textiles, leather, and gems and jewellery. The US is seeking duty relief on industrial goods, electric vehicles, dairy, and certain agricultural products. The deadline for the first-phase deal is anchored to the July 9, 2026 expiry of the 90-day suspension period for reciprocal tariffs.

Tariff Authority	Current Rate for India	Status Post-SCOTUS Ruling	Refunded Under CAPE?	Key Sectors Affected
IEEPA Reciprocal (26%)	0% (invalidated)	Refunded via CAPE (IEEPA component)	Yes	Textiles, engineering, chemicals, gems
IEEPA Russia Oil Penalty (25%)	0% (invalidated)	Refunded via CAPE (IEEPA component)	Yes	All India exports (stacked on reciprocal)
Section 122 Baseline	10%	Active; not affected by SCOTUS ruling	No	All India goods (broad)
Section 232 (Steel & Aluminium)	25%	Active; not part of IEEPA framework	No	Steel, aluminium, auto parts
MFN (Standard) Duties	Varies by HS code (avg ~3-7%)	Active; unchanged	No	All sectors at base rate
Pharma (MFN)	0-3% (most products)	Active; was exempt from IEEPA throughout	Not applicable	Pharmaceuticals

For Indian exporters, the immediate focus should remain the CAPE negotiation window. The trade deal discussions may take months. The CAPE refund window is measured in weeks.

The Compliance Layer: What Indian Exporters Must Know Before Negotiating

A critical compliance dimension applies to CAPE that Indian exporters must understand before they approach US buyers. CBP has stated that filers submitting CAPE declarations must certify that all entries included in the declaration comply with applicable US customs laws. This means US buyers will be conducting or should be conducting a compliance review of their entry data before filing.

For Indian exporters, this creates an indirect risk. If a US buyer discovers that a shipment had a customs compliance issue, such as a valuation dispute, a mislabelled country of origin, or an incorrect HS classification, that entry may be excluded from the CAPE declaration or trigger a compliance review that delays the refund. An Indian exporter whose shipments are caught in a compliance hold has a reduced refund pool to negotiate over.

Indian exporters should therefore proactively review their own shipment documentation from the IEEPA period. Ensure that the country of origin declarations, HS codes, and declared values on all commercial invoices are consistent with what was declared at US entry. Any discrepancies between the Indian export documentation and the US entry documentation will complicate the negotiation and potentially expose the exporter to liability.

Document	Why It Matters for CAPE	Where to Obtain It
CBP Form 7501 (Entry Summary)	Shows IOR, duty paid, HS code, and entry number. The foundation of any CAPE claim or negotiation.	Request from US buyer or US customs broker
Commercial Invoice (Indian side)	Needs to match declared customs value at US entry. Discrepancies create compliance risk.	Your own records
Bill of Lading / Airway Bill	Identifies shipment details and links to entry number.	Your freight forwarder
Packing List	Supports HS classification and value declarations.	Your own records
Purchase Order / Contract (tariff period)	Shows original agreed price and any renegotiated pricing after tariff imposition. Key evidence for 'shared burden' argument.	Your own records and buyer correspondence
Price adjustment memos / credit notes	Documents that the tariff cost was shared between you and the buyer. Critical for calculating your claim.	Your own records and email correspondence
US Customs Broker Power of Attorney	Required if you are a DDP exporter filing CAPE through a broker.	Execute with your appointed US customs broker

One additional compliance point: CBP has clarified that CAPE declarations cannot be amended once accepted. If a declaration contains an error, those entries must be submitted in a new declaration. US buyers filing incorrect declarations face rejection and must refile, extending the timeline. An Indian exporter whose negotiation argument hinges on specific entry numbers needs to ensure those entries are accurately reflected in the buyer's declaration.

The Practical Calculus

Consider what actually happened between April 2025 and February 2026. Indian exporters received reduced purchase orders. Buyers renegotiated prices. Some shipments were cancelled. Working capital was stretched across a tariff environment that turned out to be unconstitutional from the day it was imposed. The SCOTUS ruling did not restore the lost orders or repair the compressed margins. It created a refund pool, the benefits of which will flow to US importers unless Indian exporters act now.

The commercial negotiation for a share of the CAPE refund is not asking for charity. It is asking for an accounting of who actually bore the cost of an unlawful tariff regime. US buyers who renegotiated purchase prices downward to offset tariff costs were, in effect, shifting part of the tariff burden onto their Indian suppliers. The refund of that tariff creates a corresponding obligation, not a legal one but a commercial and relational one, to account for that cost allocation. Indian exporters have the facts, the documentation trail, and the commercial relationship. What they need is the urgency to act before the window closes.

The administration has signalled it may contest some refund claims. Treasury Secretary Scott Bessent predicted the CAPE process 'could be a mess' lasting months or years. That uncertainty cuts both ways. Buyers who receive their refunds quickly and quietly may prefer to settle any exporter claims before the broader legal picture becomes more complicated. An exporter who approaches the conversation professionally, with precise documentation and a reasonable claim, creates the conditions for a swift resolution.

There is a further dimension that Indian exporters should not overlook. The post-ruling competitive landscape for India in the US market is the most favourable it has been in years. At 10 percent Section 122, India competes with Vietnam and Bangladesh on level tariff terms for the first time since Liberation Day. Buyers who shifted sourcing during the tariff period are now recalculating. An Indian exporter that resolves the CAPE refund question cleanly, demonstrates documentation discipline, and signals readiness for renewed volumes starts FY 2026-27 from a position of strength.

The CAPE portal is 48 hours old. The refund clock is running. Every day that passes without an approach to the buyer is a day closer to the moment when the conversation can no longer change the outcome.