The roll back of De Minimis will impact both small and medium exporters across global marketplaces and D2C  | Photo Credit: style-photography

Kalancea, a D2C company with over 65 per cent of exports to the US, has been hustling to ship out its handwoven sarees before August 29, the date when US ends duty-free imports of products under $800.

“We are in talks with logistics partners and other exporters to understand about the implementation, it’s all very uncertain now. We hope we don’t lose out to peers selling in the US,” Kavea R Chavali, co-founder, Kalancea, says.

As the US government suspends duty-free imports of products under $800 from all countries effective August 29, small and medium-size exporters (both on marketplaces and D2C) are set to be impacted. Their shipments will now go through US customs clearance and all goods valued at $800 or less will be subject to product and country-specific tariff rates, the specifics of this still unclear.

Trade impact

Exporters of low-value goods told businessline that they now have to set up systems capable of classifying Harmonized System Nomenclature (HSN) codes and applying relevant duties. Along with this, they are also staring at increased shipping time and higher cost of products, all of which will lead to fall in volumes. India Post, a key logistics partner for these shipments, has also suspended services as it navigates the uncertainty.

“The US move to end the sub $800 duty-free rule will disrupt global e-commerce and hit exporters in India that depended on small-value, duty-free shipping,” Ajay Srivastava, founder, Global Trade Research Initiative, said. He estimates this pool to be around 30,000-40,000 in number. “As US systems to implement these changes are not yet fully in place, there is also uncertainty over how much duty will be charged on shipments arriving after August 29,” he added.

Saurabh Goyal, Co-founder and CEO of cross-border commerce platform Xindus, said that fashion, home decor, jewelry, handicrafts are some areas where India has significant volumes often via small/package on long tail multi-SKUs. “These typically lack robust compliance rails,” he said. “We have some Xindus products that can now handle this complexity for marketplaces and brands and we are handholding our customers to navigate this,” he added.

Srivatsan Sridhar, Co-founder and CEO, Skydo, a cross-border payments platform, estimates that ~4–6 per cent of India’s goods exports to the US fall under this segment. “While this may compress margins for small sellers, stricter compliance requirements also increase operational costs,” he said, adding that more exporters may look to diversify into trade corridors such as the UAE and the UK.

Margins to take a hit

Aditya Bhansali, Co-founder, Endless Stationery, a seller with 70 per cent of its exports to the US, is bracing for a drop in volumes and working on compliance. “While we will go in for part price hikes, it will impact margins. Customers may also face longer shipping timelines due to procedures at US Customs,” he adds.

Rajesh Nahar, CEO, Cbazaar.com, a company selling festive and wedding wear to the South Asian diaspora in the US, says: “We’ve been over 20 years in operations and are reconfiguring our systems to adapt but it is set to be tougher for smaller exporters.”

Adapting to change

Reeju Datta, co-founder, Cashfree Payments, said : It is still early to assess the full implications of the rollback of the De Minimis exemption. What’s clear, however, is that Indian MSMEs remain deeply competitive in global markets, and their ability to adapt quickly has always been their strength. At Cashfree Payments, we are actively engaging with our merchant partners to understand their evolving needs and will incorporate any necessary changes required into our systems to power their growth. 

Published on August 25, 2025