In a sweeping policy shift with global implications, the United States has ended duty-free treatment for low-value imports from China and Hong Kong, disrupting billions of dollars in cross-border trade. The decision, enacted through an Executive Order on 2nd April 2025, removes the de minimis exemption that previously allowed packages under USD 800 to enter the U.S. market without duties. Over 1.4 billion such packages, valued at USD 64.6 billion, arrived in the U.S. in 2024 alone—nearly 60% of ..
India, notably, is not included in the withdrawal. The de minimis benefit remains intact for Indian exporters, amounting to a rare unilateral tariff concession in today’s tightly negotiated trade environment. For Indian businesses—especially MSMEs and artisan-led enterprises—this presents a significant cost advantage over Chinese sellers in the world’s largest consumer economy.
Until now, shipments valued under USD 800 could enter the U.S. without customs duties under the de minimis rule. These duty-free shipments, often arriving via postal and courier routes, allowed Chinese sellers to undercut competition in price-sensitive categories. That window of advantage has now closed. With this new U.S. directive, Chinese and Hong Kong e-commerce exporters will no longer benefit from the de minimis exemption. For postal shipments, a new duty of 30% ad valorem or $25 per item
(whichever is higher) will apply from May 2, 2025, which will further increase to $50 per item from June 1, 2025. For non-postal shipments—such as those sent via courier and express parcels—standard U.S. Most Favoured Nation (MFN) import duties will apply, typically ranging from 2.5% to 32% depending on the product category. In addition, applicable goods may be subject to supplementary Section 301 tariffs in certain cases. In contrast, India B2C e-commerce continues to enjoy duty-free access under the de minimis provision, that positions Indian e-commerce exporters at a significant cost advantage in the world’s largest consumer market. This shift comes at a time when India’s own digital trade ecosystem is showing robust growth. According to recent data, India ranks as the 4th largest domestic e-commerce market globally, with USD 120.8 billion in revenue in 2024 and a growth rate of 20.3%, one of the highest among major economies. Up to 70% of Indian SMEs are now actively leveraging
e-commerce platforms, laying a strong foundation for growth in export performance. The global e-commerce market itself is expected to grow by 10.4% in 2025, outpacing the global economy (3.2%) and the global retail sector (4.2%).
India’s strengths lie not only in its digital readiness but also in its product diversity and cultural craftsmanship. In segments such as fashion and apparel, gems and jewellery, home and living, organic wellness and beauty, and handcrafted lifestyle products, India holds a distinct edge. Regions like Jaipur and Surat are already transforming into digital hubs for
traditional exports—from semi-precious stones to beaded gowns and embroidered fabrics to artisanal décor and heritage textiles.
These are not just entrepreneurial stories; they are proof of e-commerce’s power to democratise trade. By reducing barriers and middlemen, e-commerce enables even first-time exporters to reach global buyers at minimal cost. This has immense potential for employment, women-led businesses, and revival of traditional skills.
Despite this momentum, certain challenges remain. Chief among them is the procedural complexity around the Export Data Processing and Monitoring System (EDPMS). Under th ..
Exporters often face delays in bank reconciliation, especially when dealing with platform-based payments or returns. In many cases, banks are hesitant to allow write-offs for returned or rejected goods, as well as expenses such as e-commerce platform charges, overseas warehousing fees, payment gateway deductions, and other transactional costs. This leads to the accumulation of ‘unsettled’ transactions. This not only affects the credit rating of exporters but can also hinder future exports if not ..
These frictions, if left unresolved, could limit the segment that the government seeks to promote. A more agile, e-commerce-friendly framework for compliance—perhaps through self-declaration models or quarterly reconciliation windows—is the need of the hour. Additionally, tailored financial products like export credit for inventory, insurance for e-commerce exports, and fintech-driven forex platforms could go a long way in supporting first-time exporters.
With the U.S. closing its doors to duty-free Chinese shipments, and India still benefiting from de minimis access, could tip the balance in favour of Indian e-commerce exporters. For Indian exporters—especially those in Tier 2 and 3 cities—the moment is ripe to expand their presence and build long-term customer bases abroad.
However, the window may not remain open forever. Competing nations in Southeast Asia are already reforming their e-commerce export frameworks. India must act quickly, decisively, and collaboratively—with government, industry, and logistics players moving in tandem. The global marketplace is ready. The world is clicking. India must now deliver.
Source Name : Economic Times