Cross-border ecommerce shipments from India to US may fall 25%

Cross-border payment firms expect a 15–25% decline in ecommerce shipments from India to the US, as Washington withdraws its US$ 800 duty-free import provision on August 29. The move will hurt small exporters of handicrafts, jewellery, and textiles, prompting payment firms to target larger exporters.

The cross-border payment firms are expecting a 15–25% drop in ecommerce shipments from India to the United States after Washington scraps the provision allowing tax-free imports of packages worth up to US$ 800 (about ₹70,000) from August 29. 

The “de minimis” exemption, ended by an executive order signed by President Donald Trump on May 2, had long benefited Indian exporters—especially small businesses and online-first direct-to-consumer (D2C) brands—by easing access to the world’s largest consumer market.

The impact will be most severe for sellers of handicrafts, textiles, jewellery, and home décor products that reach American consumers through platforms like Amazon and eBay. Amazon’s Global Selling programme alone helped Indian merchants clock over US$ 8 billion in sales in 2023. 

With the duty-free route gone, exporters may be forced to rely on sea freight, leading to higher costs, longer delivery timelines, and price hikes for US buyers, especially in categories like ethnic jewellery.

While exact numbers for such shipments are unavailable, the commerce ministry data shows that in July India exported- tea worth ₹815 crore (US$ 93.6 million), gems and jewellery worth ₹20,577 crore (US$ 2,362.7 million), and handicrafts worth ₹1,320 crore (US$ 151.6 million).

 Industry sources estimate that over 40% of India’s exports to the US were routed through this channel, largely by small and mid-sized sellers leveraging Amazon, Walmart, Etsy, eBay, and their own D2C storefronts.

The change also affects India’s fast-growing cross-border payments sector. The RBI has recently tightened oversight of players such as BriskPe, Skydo, and PayGlocal, which process international transactions. Larger firms like Cashfree and Razorpay also serve this space, supported by regulatory licences that have helped attract venture capital. With smaller exporters hit hardest, many payment firms are expected to pivot towards serving medium and large exporters, traditionally catered to by banks.

While merchandise exporters brace for higher compliance costs, and added paperwork for tariffs, software exports—which account for nearly half of India-US trade—remain unaffected.