Chinese Shopping Apps Under Fire As Local Market Goods Languish

Chinese goods up to Rs 5,000 ordered online soon to be under the radar of the government and might attract customs.

Chinese shopping apps are under a lot of scrutiny by local traders.

(Photo: The Quint)

Indian online shoppers might soon be deprived of making the most of the attractive discounts on Chinese shopping platforms and apps as the Indian government is considering imposing some restrictions on goods purchased on these websites and apps. These goods are shipped to buyers directly as “gifts” and valued under Rs 5,000.

The move has been triggered following concerns by local traders who feel it is having an adverse impact on local manufacturing and it also violates domestic laws they say.

The department of industrial policy and promotion (DIPP) has proposed capping the maximum number of products that are purchased on these portals to four per buyer in one year.

Since there is no duty on “gifts” under Rs 5,000 which are purchased from outside and are intended for personal use, the number of Chinese imports are in a large number.

According to The Economic Times, India’s imports from China amounted to $76.2 billion in 2017-18 while exports from the country were about half of that figure at $33 billion.

Talking to The Economic Times, a senior government official said that they had suggested the cap, but the final call will be taken by the customs authorities. He also added that there will not be any restrictions on essential medicines.

One of the experts whom ET spoke to said that a lot of the online gifts come from China who are very generous in terms of providing cheap products.

Since these products don’t have to go through customs and can be imported directly and then delivered to a desired address, online shoppers don’t think twice before opting for such options.

There are a large number of Indian etailers who have come forth and complained to the government that the Chinese elite etailer club of AliExpress, Club Factory and Shein are taking undue advantage of the exemption on gifts up to Rs 5,000.

Another issue with this kind of a setup is that there are many Chinese online shopping portals that do not require a legitimate government ID proof for authentication and purchases. This makes it difficult tracking such transactions and they can easily evade customs. Hence, the government will have trouble imposing restrictions on Chinese online sellers.

Since the goods are directly sent to the customers’ addresses, the government will have to setup an effective tracking system in cahoots with the couriers, the postal services and even the Reserve Bank of India to track the imports.

— with inputs from The Economic Times.