India's exporters set to benefit as US tariffs reduced

India products clearing US customs from Tuesday onwards will be subject to 10% duties instead of 50% when the contracts were negotiated, opening doors for some kind of a relief even for cargoes on seas. While immediate windfall will be for the importer who would have to pay 40% less tariffs , some of it may be passed on to Indian sellers. “Many exporters had an understanding with the buyers while negotiating contracts at very thin margin or even loss that benefit from change in duties would be shared with them too,” CEO and Director General of Federation of Indian Export Organisations (FIEO) Ajay Sahai said. The transit time for the US ports ranges from 45-60 days. So at any given point of time one-eighth of annual exports to the US of $ 10-12 billion are on seas so the benefit could be considerable if importers share the benefit of lower duties, he added. Tariffs on India remained at 50% from last week of August 2025 to February 6 this year. Both sides issued a joint statement that removed 25% tariffs related to Russian oil purchases and agreed to bring down reciprocal tariffs to 18% from 25%. Before the order of Indian reciprocal tariffs came, the US Supreme Court struck down all country-specific tariffs. The US Customs and Border Protection notified 10% additional duties on imported articles from all countries for a period of 150 days under the Section 122 of the Trade Act of 1974 just hours before the new rates came into force at 12:01 am eastern standard time on February 24, 2026 or 10:30 am India time Tuesday. Following the Supreme Court judgement the US President Donald Trump announced 10% global tariffs and hours later announced that they will be raised to 15%. The notification, however, operationalised only 10% tariffs. Meanwhile a White House spokesperson quoted by NBC News said that the administration is preparing a separate order to raise additional tariffs to 15%. There is no word from the US administration on the refund of tariffs paid before the Supreme Court struck down country-specific duties. The refunds, if any, will also be collected by importers. Sharing them with Indian suppliers will depend on the understanding reached while negotiating contracts. Exporters are not expecting cash to flow to them if refunds materialise but adjustments in future contracts. Democrats in the US Senate have proposed a bill that would require U.S. Customs and Border Protection to issue refunds over the course of 180 days and pay interest on the refunded amount. Logistics company Federal Express has already on Monday sued the US government for the refund of tariffs it paid.