The United States may partially refund the penalty imposed on India over imports of Russian crude oil after February 7, when President Donald Trump’s executive order withdrawing the 25 per cent additional levy on Indian imports for purchases of the commodity came into force, said people familiar with the matter.
The quantum of the possible refund is not clear, they said
“The refund is for the small subset of items or transactions for which duty may have already been collected by the time the order became operational, but the actual import was after 12 am on February 7. It is more like a transitional provision,” said one of the persons, who did not wish to be identified.
India and the US on Saturday announced a framework for an interim trade agreement, under which tariffs on “originating goods of India” will be reduced to 18 per cent. Clearing the path for a full-fledged bilateral trade agreement (BTA), the interim pact covers tariff cuts and non-tariff barriers with a broader, legally binding BTA covering goods, supply chains and digital trade.
The US, through a separate executive order, eliminated the 25 per cent additional tariffs on India for purchasing Russian oil from February 7, and said it will monitor whether India resumes importing Russian oil directly or indirectly.
In its executive order, issued on February 6, the US said, “Effective with respect to goods entered for consumption, or withdrawn from the warehouse for consumption, on or after 12:01 a.m. eastern standard time on February 7, 2026, products of India imported into the United States shall no longer be subject to the additional ad valorem rate of duty of 25 per cent.”
It further said, “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 for such refunds.”
The reciprocal tariff will be reduced to 18 per cent from 25 per cent after the US issues an executive order in this regard, which is expected soon.
“The (executive) order nowhere says retrospective application,” said another person, adding that the text of the agreement is likely to have clauses on dispute settlement in future.
“The executive order that removed the extra tariff did mention “provisions of refunds” for the duties collected while the additional tariff was in force. But the legal and procedural mechanism for claiming those refunds isn’t fully laid out yet. The US intends to allow refunds for duties collected in that period, though the exact rules or timing are still to emerge. This is causing concern for exporters,” said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO).
A trade expert said duties have been removed only prospectively, that is only on Indian goods entering the US from February 7, 12:01 am EST. However, in some situations, where duties are charged on goods after the order came into force, the levies are refundable to the importers.>
