US Crackdown On Chinese E-Commerce Creates Export Opportunity For India: GTRI

(MENAFN- KNN India) New Delhi, Apr 14 (KNN) Global Trade Research Initiative (GTRI) reported on Sunday that the United States' recent crackdown on Chinese low-value e-commerce shipments has created a 'rare and potentially lucrative' opportunity for Indian exporters, particularly those dealing in handicrafts, fashion, and home goods.

GTRI noted in its report that India, with over 100,000 e-commerce sellers and current exports valued at USD 5 billion, is well-positioned to fill the market gap created by restrictions on Chinese products.

However, the report emphasised that significant reforms would be necessary for India to fully capitalise on this opportunity.

On April 2, American President Donald Trump signed an executive order eliminating the 'de minimis' exemption that had previously allowed small packages valued up to USD 800 to enter the US duty-free-a provision that had benefited both Amazon and Chinese companies like Shein and Temu.

Trump also increased tariffs on Chinese goods, including e-commerce products. Starting May 2, all such shipments from China and Hong Kong will face a 120 percent import duty, effectively ending their duty-free entry.

The per-item duty will increase from USD 75 to USD 100 between May 2 and May 31, and will further rise to USD 200 from June 1.

While other countries maintain their de minimis privileges, the report cautioned that this window of opportunity might be brief, as the US administration has suggested these restrictions could be expanded in the future.

Regarding necessary reforms, the GTRI report highlighted that India's current trade system primarily serves large, traditional exporters rather than small online sellers.

For e-commerce exporters, bureaucratic obstacles often outweigh available support. Indian banks represent a significant challenge for exporters as they struggle to manage the high volume and small-value transactions characteristic of e-commerce exports.

Additionally, unlike larger exporters who have access to loans with 7-10 percent interest rates and purchase-order based financing, small online sellers typically face rates of 12-15 percent and are excluded from public credit programs.

The report suggested that including these sellers under priority sector lending could help create a more level playing field.

(KNN Bureau)

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