After warning Chinese e-tailers in India last month, the government has imposed a clampdown on shipments of goods from Chinese e-commerce platforms to India as gifts.
The decision comes after noticing a violation of domestic law and a rise in the number of products from China coming in as gifts. The order is mainly to curb the rampant practice by Chinese e-tailers in the country to exploit loopholes in the present regulations.
At present, gifts up to Rs 5k for personal use are exempted for customs duties. But Chinese platforms in the country have continuously been getting goods in the guise of gifts, according to customs official.
Last week, Mumbai customs department had noticed multiple consignments of goods in the guise of gifts. It also found address used in most cases as fictitious, as per ET report.
The govt move will provide relief to sellers, who are facing competition for Chinese e-tailers. However, the government is expected to take up the issue in the draft e-commerce policy, which is about to be unveiled in a few weeks.
Earlier, many small traders and domestic e-tailers have complained against e-tailers from China such as Club Factory, Shein and Aliexpress, who are taking advantage of the exemption from customs duties.
This brings the prices of such goods down and gives them an unfair advantage over sellers on domestic e-commerce marketplaces. Products on these platforms are over 50 per cent cheaper than Indian e-comm sites.
In the last couple of years, Chinese e-tailers have gained a good amount of traction in India. All the abovementioned firms boast of having 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. Shien app has 50 lakh download in India. It claims to reportedly do over 10,000 orders per day.
Domestic sellers organisation AIOVA and citizen engagement forum LocalCircles had sought to curb these practices and right imposed of duty on these platforms.