The U.S.’s new policy, which ends the tax-free import of packages worth up to $800 on August 29, is expected to cause a significant drop in cross-border e-commerce payments from India. Exporters and payment companies are bracing for a 15-25% fall in e-commerce shipments to the U.S.. This tax exemption, derived from a 19th-century principle, had allowed small businesses and online-first brands to sell directly to U.S. consumers.
The new policy is expected to have a major impact on Indian sellers of handicrafts, textiles, jewelry, and home decor. These sellers, who rely on platforms like Amazon and eBay, will face immediate friction in consumer buying behavior. The article notes that while the government has been focusing on export promotion, the regulatory changes in the U.S. could disrupt the efforts of these companies.