The removal of the duty‑free import regime for low‑value consignments up to $ 800 per packet through courier or postal networks addressed directly to individuals from China and Hong Kong—effective May 2—presents India with a prime opportunity to scale up its e‑commerce exports, according to a report by the Global Trade Research Initiative (GTRI).
From May 2, all imports from China and Hong Kong valued below $ 800 will attract applicable duties across courier and other channels, except the postal network. In the case of China, duties now stand at 125% after successive escalations. Other countries will continue to enjoy the exemption.
“The US ‘de minimis’ rule has been a key gateway for Chinese e-commerce companies like Shein and Temu to enter the American market. Over 1,400 million low-value packets entered the US in 2024 from the world, with China alone exporting $46 billion worth of such goods,” the report by trade policy think tank GTRI. Shein is a clothing retail giant while Temu sells heavily discounted consumer products shipped to consumers directly from China.
The report stated that this window of opportunity could be brief, as the US administration has hinted at expanding these restrictions, so India must act swiftly.
With over 100,000 e‑commerce sellers and $ 5 billion in current exports, India is well positioned to fill the void left by China—especially in customised, small‑batch segments such as handicrafts, fashion and home goods.
However, Indian banks struggle with the high volume and low value of e‑commerce exports. RBI rules currently allow only a 25% gap between declared shipping value and final payment—too restrictive for online exports, where discounts, returns and platform fees often cause larger variances. GTRI recommends raising this limit to 100% and granting banks flexibility to approve legitimate cases.
Bank fees pose another hurdle: reconciling each small shipment can cost Rs 1,500–2,000—sometimes half the shipment’s value. These charges should be waived for low‑value exports, and the reconciliation process must be fully digitised. “The RBI should also set strict service timelines and grievance mechanisms to ensure timely support for exporters,” GTRI said.
To streamline customs, the report urges a fully online system with 24/7 automated inspections and easy‑to‑follow digital checklists for small exporters. Courier‑mode shipments should be updated to accommodate terms like “delivered duty paid (DDP)”, aligning paperwork with logistics to avoid unnecessary delays.
The e-commerce exports should also be extended benefits that bulk exports get and credit for them should be made cheaper to help them grab this opportunity.
While big players get 7–10% interest loans and purchase-order based financing, small online sellers pay 12–15% and are left out of public credit programs, the report pointed out.