Indian Exporters Urge Govt to Restore Duty-Free Access to US Market

The end of the duty-free access of goods worth $800 to the US has placed exporters in an uneasy position. Now, with the imposition of customs duty, it is taking longer for even small packages to go through the customs procedure. The business sector is hoping that the Indian government would take this matter up with the US government. Earlier, goods worth $800 to the US were not subject to customs duty. However, with the start of the tariff war last year, a tariff of up to 50% has been levied in phases on Indian goods.

Furthermore, last year, the United States removed this exemption through Section 321 of the United States Tariff Act of 1930. This exemption was highly beneficial to small exporters and businesses involved in cross-border e-commerce. The termination of this exemption has created several challenges.

Small enterprises producing handicrafts and labor-intensive products are now unable to compete in the US market due to high costs. This previously available exemption also facilitated online international trade. Indian products could be delivered directly to US customers, eliminating the need for additional duties or complex documentation.

This allowed many Indian direct-to-consumer brands to gain global recognition. The decrease in orders due to the increased tariffs is directly impacting employment and income. Now, exporters want the Indian government to negotiate with the US to restore the duty-free exemption for shipments up to $800.

Sudeep, founder of Rajgarhia Exports, says that the loss of duty-free access to the US is not only causing losses, but also increasing the time it takes for goods to clear customs. The closure of this facility has left millions of small entrepreneurs across the country in a difficult situation.

Hasan Yakub, public policy expert and co-chairman of ASSOCHAM UP, says that such small export enterprises employ a large number of artisans and skilled workers. The decrease in orders due to increased duty directly impacts employment and income. This exemption under Section 321 also expedited and simplified the customs process, allowing exporters to conduct business in a fully compliant manner. The absence of this exemption leaves Indian exporters lagging behind those countries that still enjoy such exemptions.

The Indian government should urge a stable policy to ensure duty-free entry for low-value Indian shipments. This step will empower small enterprises, artisans, exporters, and the rapidly growing e-commerce export ecosystem. Make in India, Vocal for Local and will further strengthen India's growing participation in global trade.