The End of De Minimis for China - What It Means for Global E-Commerce and Lessons for India

[DrJoshua Ebenezer]

In a bold move that is reshaping global e-commerce logistics, former President Donald Trump has ordered an end to duty-free treatment under the de minimis threshold for small-dollar shipments from China and Hong Kong, effective May 2.

For years, U.S. law has allowed packages under $800 to enter duty-free under the de minimis exemption, enabling fast, low-cost cross-border shipping. This has powered the rise of platforms like Temu and Shein, allowing direct-to-consumer shipments from Chinese factories to U.S. buyers, without duties or heavy paperwork. In 2024 alone, over 1.4 billion shipments entered the U.S. this way, valued at $64.6 billion, with China accounting for nearly 60%. But this window is closing fast.

The new order imposes full tariffs on low-value goods, including a 34% penalty tariff, layered atop previous rounds, pushing the total U.S. tariff on Chinese exports above 50%. Carriers are now responsible for duty collection, and the U.S. Postal Service is tasked with enforcing this transformation in trade policy. The rationale? Combat fentanyl smuggling, tackle data gaps in customs declarations, and level the playing field for domestic retailers.

India has been a growing exporter to the U.S., especially in textiles, electronics, and consumer goods. While India currently benefits from the de minimis exemption, the U.S. may revisit this policy country-by-country. The recent tariffs on Vietnam, Thailand, and Cambodia (36–49%) suggest that India must remain vigilant.

However, this shift creates opportunity. As U.S. buyers seek alternatives to China’s disrupted e-commerce supply chains, India can position itself as a trusted sourcing hub, but only if it builds the right infrastructure:

1. Indian exporters must explore near-market inventory models to serve U.S. customers faster and at scale.
2. Invest in digital infrastructure for harmonized classification, advance shipping notices, and CBP-compliant declarations.
3. Direct-to-consumer logistics is shifting to business-to-business-to-consumer (B2B2C)—India must be ready.

Globally, de minimis thresholds were created to streamline trade for low-value goods and reduce administrative burdens. But as volumes exploded, so did risks counterfeits, narcotics, and revenue leakage. The U.S. action signals a growing consensus—the future of trade facilitation must be balanced with enforcement.

India, too, may need to reassess its de minimis policies. Is our postal and courier clearance ecosystem robust enough? Are we collecting accurate trade data from informal imports? How do we protect our MSMEs from unfair competition while still promoting ease of doing business?

China’s dominance in e-commerce logistics is being tested like never before. While this creates short-term disruption for global air cargo and cross-border retailers, it opens doors for countries like India—provided we act fast.

As U.S. policies shift from facilitation to control, nations that can adapt their export models, strengthen compliance, and build trust will rise in the new global trade order.

Let’s ensure India is among them.