According to GTRI, over 1400 million low-value packets entered the US in 2024, with China alone exporting $46 billion worth of such goods.
Chennai: As China faces 120 per cent ad valorem duty on e-commerce shipments to the US, India has an opportunity to scale up its duty-free e-commerce shipments before any possible policy change. For that, India will have to bring about quick reforms.
From May 2, the de minimis exemption for e-commerce imports valued less than $800 from China and Hong Kong will face 120 per cent ad valorem duty, while it would be duty-free for the rest of the world. However, the window of opportunity could be small as the US administration has hinted at expanding these restrictions in the future.
According to GTRI, over 1400 million low-value packets entered the US in 2024, with China alone exporting $46 billion worth of such goods. Chinese firms like Shein and Temu have been big beneficiaries of the duty-free imports.
“Goods priced less than $800 from India will face no duty and minimal inspection. Though currently India’s e-commerce exports are valued at only $4-5 billion, this route may gain traction in the coming days, especially to the US,” said Sanjay K Jain, Chairman ICC National Textiles Committee. Several studies have set an ambitious target of $400 billion for total e-commerce exports by 2030.
Seizing this opportunity requires urgent reforms as the current trade system is still geared toward large, traditional exporters and not small online sellers.
“Indian banks struggle to handle the high volume and small-value e-commerce exports. RBI rules allow only a 25 per cent gap between declared shipping value and final payment. For online exports, it is too tight as 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,” said Ajay Srivastava, founder, GTRI.
Bank fee can cost Rs1,500- Rs 2,000 and this should be waived for low-value exports, and processes must go fully digital.
India’s customs system must move online, with 24/7 automated inspections and easy-to-follow digital checklists for small exporters.
While big exporters get 7–10 per cent interest loans and purchase-order based financing, small online sellers pay 12–15 per cent and are left out of public credit schemes.
Last September, the government had enabled exporters to claim Duty Drawback, RoDTEP, and RoSCTL benefits for exports made through courier mode.
