Starting August 29, 2025, a major change is coming to U.S. trade policy that will shake up online shopping and small business exports. The U.S. is ending its de minimis rule, which allowed packages worth under $800 to enter the country without paying customs duties or taxes.
This change will hit hard for thousands of small businesses in India that sell handicrafts, textiles, and jewelry to American customers through online platforms.
What is the De Minimis Rule?
The de minimis rule has been like a “free pass” for small packages entering the U.S. The longstanding exemption allows packages valued at under $800 to enter the U.S. without being subject to tariffs. This made it easy and cheap for small exporters to sell their products directly to American buyers.
The rule was created to save money on paperwork. It cost the government more to process small duty payments than the actual tax money collected. But now, that’s all changing.
Why is This Happening Now?
President Trump signed Executive Order 14324, “Suspending Duty-Free De Minimis Treatment for All Countries,” which will eliminate the de minimis exception that exempted international shipments valued at under $800 from tariffs and most standard customs procedures for all countries except China after August 29, 2025.
The numbers tell the story of why this rule is ending. Between 2015 and 2024, de minimis entries exploded from 134 million to over 1.36 billion annually, according to U.S. Customs and Border Protection (CBP). That’s a massive increase that caught the government’s attention.
Impact on Indian Small Businesses
Small Exporters Will Feel the Pinch
Indian small businesses that export handicrafts, textiles, and jewelry will be hit the hardest. These products often fall into the under-$800 category that benefited from duty-free shipping. Now, every package will need:
- Customs paperwork
- Duty payments
- Longer processing times
- Higher shipping costs
The Numbers Don’t Look Good
Industry experts predict that India-U.S. e-commerce shipments could drop by 15-25% once this rule ends. This means thousands of small artisans and textile makers might lose their biggest international market.
What This Means for Different Industries
Handicrafts and Jewelry
Indian handicraft makers have built thriving businesses by selling directly to U.S. customers through platforms like Etsy and Amazon. With new duties and paperwork, many of these small orders might become too expensive for American buyers.
Textile Exports
The textile industry faces a double challenge. The US recently raised tariffs on Indian textiles and apparel to a steep 50%, effective August 27, 2025, in response to India’s ongoing oil imports from Russia amid geopolitical tensions. Combined with the end of de minimis, textile exporters are facing tough times.
E-commerce Platforms
Online sellers will need to completely rethink their shipping strategies. Returns will become more complex and costly, particularly when goods cross borders a second time. There is now a risk of double taxation: duties may be charged on both the original shipment and the return unless merchants have a clear customs strategy in place.
What Can Businesses Do?
Focus on Higher Value Items
Instead of selling many small items, businesses might need to focus on higher-value products that can absorb the additional costs.
Bundle Orders
Combining multiple items into single shipments can help spread the duty costs across more products.
Consider U.S. Warehousing
Some businesses are looking at storing inventory in U.S. warehouses to avoid international shipping duties altogether.
Explore Other Markets
With the U.S. becoming more expensive, businesses might look to other countries for growth. India’s free trade agreement (FTA) with the United Kingdom is expected to significantly boost shipments of garments, home textiles, carpets, and handicrafts, with textile exports projected to rise by 30–45% by 2030.
The Bigger Picture
This change affects more than just Indian businesses. U.S. consumers may pay more for international purchases because tariffs will apply to items that previously qualified for duty-free status. American shoppers who love buying unique items from international sellers will see higher prices.
The end of the de minimis rule marks a major shift in how global e-commerce works with the U.S. For small businesses that built their success on easy, low-cost shipping to America, it’s time to adapt or risk losing this valuable market.
Small exporters need to start planning now. The August 29 deadline is approaching fast, and businesses that prepare early will have the best chance of surviving this major trade policy change.
