NEW DELHI: India is considering imposing restrictions on online purchases of gifts from Chinese ecommerce platforms and applications in a move triggered by concerns over adverse impact on local manufacturing and violation of domestic laws.
The department of industrial policy and promotion (DIPP) has suggested capping purchases of “gifts” from Chinese etailers and apps at four per buyer per year, a senior official told ET.
A large number of products from China are entering India as ‘gifts’ and shipped directly to customers, according to experts, since gifts of up to Rs 5,000 intended for personal use are exempt from customs duties under the current rules.
“We have suggested a cap but the final call will have to be taken by the customs authorities,” the official said on condition of anonymity. “However, there will not be any restrictions on essential medicines.”
Although essential medicines form a significant component of imports and contribute to widening of trade deficit, the government does not want to inconvenience those in need.
India’s exports to China amounted to $33 billion in 2017-18 while imports from the country were more than double that at $76.2 billion.
“The problem is that a lot of online gifts are coming in from China, and Chinese websites are popular for cheap products. Consumers here can import directly from them and get them delivered wherever desired in the country,” said an expert on ecommerce issues, requesting not to be identified.
The Indian industry has complained to the government that Chinese etailers such as Club Factory, AliExpress and Shein are taking undue advantage of the exemption from customs duties on gifts of up to Rs 5,000.
Club Factory had, in September, said in a statement that India alone accounted for 40 million of its user base of more than 70 million users worldwide.
As per an ET report, Shein tripled its business in the country in less than a year a few months ago, catering to more than a million active users and handling over 10,000 orders daily. The platform, which began by selling western fashion products for women, clocks an average order value of Rs 1,000-1,500.
Another official said that Chinese etailers, unlike their counterparts from other countries, do not ask customers for any government-issued identity proofs to complete the transaction, making it difficult to track such transactions.
Experts said the government may therefore find it difficult to implement any restrictions on purchases from Chinese online sellers. They said that since goods are shipped directly to consumers’ doorsteps via couriers and postal gift shipments, an integrated system connecting customs, Reserve Bank of India and India Post would be needed to effectively track imports.
The development was reported by ETRetail.com