Alert for online shoppers! Govt to restrict free goods from Chinese firms like Club Factory

The year 2019 might bring some despair for online shoppers who prefer purchasing goods from foreign companies – especially China.

The purchase can be capped at four per buyer annually as suggested by DIPP. (Image: PTI)

New Delhi: The year 2019 might bring some despair for online shoppers who prefer purchasing goods from foreign companies – especially China, the government of India is planning to impose some restriction on the online purchase of goods from Chinese e-commerce platforms and applications. The purchase can be capped at four per buyer annually as suggested by the department of industrial policy and promotion (DIPP), according to an official. However, the government has left the final decision on customs authorities. The decision made by DIPP can be a big crackdown on Chinese e-commerce platforms including Club Factory, Shien and Aliexpress as the portals have been reportedly sending goods labelled as ‘gifts’ to India to skip the import duty charges. As per the current rule, gifts of up to Rs 5,000 for personal use are exempted from the custom duties. However, several other players from the e-commerce industry have complained that e-tailers from China are taking advantage of the exemption from custom duties. Chinese online marketplaces such as Club Factory, Shein and Aliexpress have gained decent user-base in India over the past one year. Apart from the restriction on import, the government is also planning to create export hubs with the help of India Post, which collects duty on imported goods. A recent report by Times of India suggests that India Post may set up as many as 20 export hubs to further strengthen local sellers to reach out of global customers. These Chinese e-tailers have become popular in India as the products offered are 50-60 per cent cheaper compared to what Indian e-commerce companies offer. In September, Chinese fashion portal Club Factor claimed that India alone accounts of 40 million out of 70 million user base in total. Likewise, Economic Times report stated that Shein through its mobile app delivers close to 15,000 pin code in tier I and tier II cities of the country. Even the Swadeshi Jagran Manch (SJM) last week accused Chinese apps and e-tailers of evading Indian laws on payment gateway, customs duties, and GST on several fronts. As per recent data, India imports more than $76.2 worth goods, which is double of what it exports to China.