US President Donald Trump has ended the duty exemption for low-value imports under $800.
India's e-commerce exports—like handcrafted jewellery and mobile accessories—will face higher costs.
Thousands of Indian small Indian online sellers relying on low-value shipments to the US are likely to be affected
US President Donald Trump’s move to suspend the de minimis duty exemption, which is applicable to low-value imports, is likely to hit India’s booming e-commerce export industry. The move will impact India’s low-value goods exports to the US in categories ranging from handcrafted jewellery to mobile accessories. The removal of the exemption will increase costs and is likely to impact thousands of small Indian sellers, the Business Standard reported.
“This erases a key cost advantage for Indian sellers, particularly those using direct-to-consumer e-commerce channels. Businesses must adjust pricing or absorb additional tariff cost, likely making Indian goods less competitive in the US,” managing partner, TechLegis Advocates & Solicitors, Salman Waris, told BS.
India has over 100,000 e-commerce sellers and around $5 billion in current exports, a trade policy think tank GRTI stated in its report titled the US E-commerce Opportunity: Why Now is the Time for Indian E-commerce. The development is likely to impact these small sellers, particularly in the customised, small-batch products like handicrafts, fashion, and home goods segment.
The suspension will be effective from August 29 and end exemptions that allowed products valued under $800 to enter the US without duties and with minimal regulatory scrutiny. The move aims to protect the US from national security threats, the White House noted in its latest order.
“In my judgment, I determine that it is still necessary and appropriate to suspend duty-free de minimis treatment under 19 USC 1321(a)(2)(C) in the manner and for the articles described below to deal with the unusual and extraordinary threats, which have their source in whole or substantial part outside the United States, to the national security, foreign policy, and economy of the United States,” the White House order stated.
The move was hinted by the US president months before the White House passed the suspension order on July 30. The threat to remove exemptions on duty was prompted by the rising presence of Chinese e-commerce companies like Shein and Temu in the American market, particularly after the US raised the exemption limit from $200 to $800 in 2016. The GTRI report highlighted that the raise fueled the Chinese sellers to offer ultra-cheap prices. The report stated that around 1400 million low-value products entered the US in 2024 from all the countries, out of which China alone contributed $46 billion.
“Over 1400 million low-value packets entered the US in 2024 from the world, with China alone exporting $46 billion worth of such goods,” said GTRI in its report.
