India Govt to cap purchase of gifts from Chinese e-tailer, apps

With a rise in the number of products from China coming in as gifts and violating domestic laws, the Indian government is planning to impose a restriction on the online purchase of goods from Chinese e-com 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. The final decision is left on customs authorities.

At present, gifts up to Rs 5k for personal use are exempted for customs duties. Sources also talked about including essential medicine in the capped category. But looking at their nature of the requirement, the department has kept medicine aside.

Earlier, several firms from the online commerce industry have complained that e-tailers from China such as Club Factory, Shein and Aliexpress are taking advantage of the exemption from customs duties. All the abovementioned firms claimed to have been popular and boast of a huge user base in India.

Club Factory is ranked among the top e-commerce platforms in India. It claims to have around 60 per cent of its worldwide user base in India and serves over 28k pin codes in the country.

Whereas Shein, which started as selling the western product for women, now has grown three-time in less than a year. The portal claims to cater to over a million active users and handling over 10,000 orders per day, as per ET report.

Last week, Swadeshi Jagran Manch (SJM) had also accused Chinese apps and e-tailers of bypassing and evading a range of Indian laws on payment gateway, customs duties, and GST.

Ashwani Mahajan, national co-convenor of SJM, who talked to commerce ministry has demanded all postal gift shipments from China be stopped and unregistered apps or firms be banned.

Chinese firms have an advantage as they have cheaper products and can facilitate transactions process without a requirement of any identity proof approved by the govt, according to an industry expert who wished to be anonymous.

Currently, India imports over $76.2 worth goods, which is double of what it exports to China.