On April 2, US President Donald Trump signed an executive order removing the de minimis exemption for imports from China and Hong Kong.
| Photo Credit:
NATHAN HOWARD
The US decision to impose 120 per cent import duty on Chinese e-commerce shipments valued under $800, ending their duty-free entry, could open up opportunities for Indian online sellers if bottlenecks in banking and customs are quickly fixed and suitable export incentives are extended by the government, according to research agency Global Trade and Research Initiative.
With over 100,000 e-commerce sellers and $5 billion in current exports, India is well-positioned to fill the gap left by China, particularly in customised, small-batch products like handicrafts, fashion, and home goods, the report, shared on Sunday, pointed out.
“Starting May 2, Chinese e-commerce shipments under $800 to the US will face a steep 120 per cent import duty, ending their duty-free entry. This move is expected to disrupt Chinese supply chains and open the door for other countries,” the report said.
On April 2, US President Donald Trump signed an executive order removing the de minimis exemption for imports from China and Hong Kong. “This rule had previously allowed small packages valued up to $800 to enter the US without any duty benefiting Amazon and Chinese firms like Shein and Temu,” the report noted.
India to step up
For India, seizing this opportunity requires urgent reforms as India’s current trade system is still geared toward large, traditional exporters—not small online sellers, according to Ajay Srivastava from the GTRI.
RBI rules allow only a 25 per cent gap between declared shipping value and final payment, which is too tight for online exports, where discounts, returns, and platform fees often lead to larger differences. “Raising this limit to 100 per cent and giving banks flexibility to approve legitimate cases would help,” the report suggested, adding that bank fees should also be brought down.
India’s customs system must move online, with 24/7 automated inspections and easy-to-follow digital checklists for small exporters, it added. E-commerce sellers should also get access to affordable loans.
The report further pointed out that shipments sent by courier, which is common in e-commerce, do not qualify for key export incentives like RoDTEP, Duty Drawback, or the Advance Authorisation Scheme. “This puts online exporters at a disadvantage. Extending these benefits to e-commerce shipments is critical,” it said.
Published on April 13, 2025