Indian E-Commerce Exporters Could Be The Winners In US-China’s Trade War, Says GTRI

With US set to impose a steep 120 per cent import duty on Chinese and Hong Kong shipments below $800 starting May 2, Indian sellers could step into the void.

According to GTRI Founder Ajay Srivastava, the biggest roadblocks facing India’s online exporters lie in outdated systems designed for bulk exporters.

Source : Freepik

The United States’  policy shift on low-value imports from China has created a timely window of opportunity for Indian e-commerce exporters, according to think tank Global Trade Research Initiative (GTRI). With Washington set to impose a steep 120 per cent import duty on Chinese and Hong Kong shipments below $800 starting May 2, Indian sellers could step into the void — provided policy bottlenecks are addressed swiftly.

India currently boasts over one lakh e-commerce exporters, contributing $5 billion in annual exports, reported PTI. This positions the country as a strong alternative to Chinese platforms like Shein and Temu, especially in niches such as handicrafts, fashion accessories, and home décor. But experts caution that without systemic reforms, India may struggle to convert this moment into sustained export growth.

Urgent Reforms Needed In Banking And Customs

According to GTRI Founder Ajay Srivastava, the biggest roadblocks facing India’s online exporters lie in outdated systems designed for bulk exporters. “India is well-positioned to fill the gap left by China particularly in customised, small-batch products like handicraft, fashion, and home goods, but only if it quickly fixes bottlenecks in banking, customs, and export incentives,” he said.

Srivastava pointed out that Indian banks find it difficult to process the high volume of low-value transactions typical of e-commerce. Current RBI rules cap the acceptable gap between declared shipping value and actual payment at 25 per cent. “This is too tight for online exports, where discounts, returns, and platform fees often lead to larger differences,” he said. Raising this limit to 100 per cent and giving banks more flexibility could ease the burden.

Banking charges also remain a concern. Reconciling micro-shipments can cost Rs 1,500–2,000 per package, often eating up nearly half the shipment’s value. GTRI suggests waiving such fees and implementing a fully digital process. Clear service timelines and grievance redressal mechanisms from the RBI are also crucial, it added.

Leveling the Playing Field for Online Exporters

On the customs front, the think tank recommends moving to a 24/7 digital inspection system with simple checklists tailored for small businesses. Existing systems, designed with large exporters in mind, are poorly suited for e-commerce sellers. Courier shipments — the preferred mode for most online exporters — also need to reflect practical logistics terms like Delivered Duty Paid (DDP) to avoid delays and mismatched documentation.

Access to finance remains another pain point. “While big players get 7–10 per cent interest loans and purchase-order based financing, small online sellers pay 12–15 per cent and are left out of public credit programs,” GTRI said. Including them under priority sector lending would help close this gap.

Finally, key export incentives like RoDTEP, Duty Drawback, and Advance Authorisation are currently unavailable for courier-mode shipments. Extending these to e-commerce exporters is essential for fair competition, the report emphasised.

With global dynamics shifting and Chinese dominance under pressure, India has a rare chance to boost inclusive, digitally-driven export growth. “Seizing this opportunity requires urgent reforms,” Srivastava said.