US Abandons De Minimis Rule: Indo-US Trade Effect

On 29 August 2025, the United States lost its De Minimis exemption, destabilizing e-commerce and postal trade between it and India. In the rule, duties had been admitted to all consignments below 800 dollars per capita per day, whereas now all consignments are subject to custom inspection and levies.

What Was the De Minimis Rule?

The exemption made cross-border trade easier since low-value goods could be brought in without paying duties. The US recorded 1.36 billion shipments under this category in 2024, the exporters and consumers of the US benefiting by lowering the costs and expediting the delivery process.

Why It Was Withdrawn

US government abandoned the rule to avoid undervaluation, to improve security of imports and to raise the amount of revenue in form of tariffs. The change was announced on 30 July 2025 by President Donald Trump, and became effective on 29 August 2025.

Impact on India Post

On 25 August 2025, India Post suspended most of its parcel services to the US, but remains with documents and gifts below 100 dollars. This has been very detrimental to the Indian families and businesses that depend on postal exports. In some hubs such as Coimbatore, almost 15% packages were heading towards the US.

Effect on Indian MSMEs

The worst hit are the MSMEs that export textiles, jewellery, electronics and pharmaceuticals. The transition of the more complex Entry Type 11 to the previous, less complex Entry Type 86 has exposed the exporters to detailed paperwork, and greater compliance expenses with shipment delays.

Key Challenges

• Increasing the responsibilities can reduce the profit margins.
• The transfer of costs to the consumers may reduce demand.
• More paperwork increases operational loads.

Way Forward

Exporters are forced to implement modern compliance systems and change their pricing strategies to remain competitive. In the meantime, the stakeholders of the Department of Post and industry in India are in talks with the authorities in the US to create clearer frameworks of duty and reinstate the smooth-flowing trade.