Explained: Why India Post Stopped Sending Couriers Over $800 to the U.S.
Explained: Why India Post Stopped Sending Couriers Over $800 to the U.S.
The U.S. Executive Order No. 14324, effective August 29, 2025, imposes customs duties on nearly all international postal shipments to the U.S., except for specific exemptions.
India Post has suspended booking for most postal articles to the U.S. starting August 25, 2025, except for the following:
Exempted Items:
Letters/Documents: Includes personal correspondence, business documents, legal papers, and similar non-commercial items.
Gift Items up to USD 100:
Small gifts valued at or below USD 100 (approximately ₹8,400 at ₹84/USD) remain duty-free.
Examples include:
Personal gifts like books, small electronics (e.g., earphones), clothing, or handicrafts under USD 100.
Non-commercial items sent as presents, not for resale.
Suspended Items:
Parcels:
Includes merchandise, commercial shipments, and e-commerce packages (e.g., clothing, electronics, jewelry, toys).
Speed Post Items:
Covers express parcels, such as consumer goods or business shipments, unless they qualify as gifts under USD 100.
Registered Items:
Non-document items like packaged goods or products exceeding USD 100 in value.
Insured Items:
High-value goods insured for transit, unless they are documents or gifts under USD 100.
Cash on Delivery/Money Orders:
Any items involving financial transactions beyond documents or small gifts.
India Post Parcels:
General parcel services for items like household goods, textiles, or electronics, unless exempt.
suspension applies to all postal articles except letters/documents and gifts up to USD 100.
Common affected items include e-commerce exports (e.g., Indian handicrafts, apparel, spices) and personal parcels exceeding the gift exemption.
Key Facts
Executive Order No. 14324:Issued by the U.S. administration on July 30, 2025, under the International Emergency Economic Powers Act (IEEPA).
Eliminates the de minimis exemption, which previously allowed goods valued up to USD 800 to enter the U.S. duty-free with minimal paperwork.
Effective August 29, 2025, all postal shipments (except gifts under USD 100) will incur customs duties based on:Ad Valorem Duty: A percentage-based duty tied to the item’s value and the IEEPA tariff rate for the country of origin (e.g., India faces a 25% base tariff plus a 25% penalty for Russian oil purchases, totaling 50%).
Specific Duty:
A flat rate of USD 80–200 per item, available for six months as an alternative for carriers.
Transport carriers or “qualified parties” (approved by U.S. Customs and Border Protection, CBP) must collect and remit duties, but undefined processes have caused operational challenges.
India Post’s Response:
Temporary suspension of most U.S.-bound postal services starting August 25, 2025, due to air carriers’ inability to comply with new duty collection rules.
Exemptions:
Letters/documents and gifts up to USD 100 continue to be accepted, subject to CBP/USPS clarifications.
Refunds offered for postage on undeliverable booked items.
India Post is coordinating with CBP, USPS, and air carriers to resolve issues and resume services.
Trade Context:
The suspension coincides with heightened U.S.-India trade tensions, including a 25% tariff on Indian goods and an additional 25% penalty for India’s Russian oil imports, effective under the Trump administration.
The policy is global, not India-specific, affecting all countries’ postal shipments to the U.S.
Operational Challenges:
CBP’s preliminary guidelines (August 15, 2025) lack clarity on “qualified parties” and duty collection mechanisms, leading air carriers to refuse U.S.-bound consignments after August 25.
India Post handles 100–200 tonnes of U.S.-bound cargo monthly (3 tonnes daily), indicating significant disruption.
Other Postal Services:European postal operators (e.g., Deutsche Post, Scandinavia, Austria, France, Belgium) have also suspended U.S.-bound parcel services due to similar issues.
Timeline
July 30, 2025:
U.S. President Donald Trump signs Executive Order No. 14324, withdrawing the USD 800 de minimis exemption effective August 29, 2025.
August 15, 2025:
CBP issues preliminary guidelines, but critical details (e.g., duty collection processes, qualified parties) remain unresolved.
August 23, 2025:
India Post announces temporary suspension of most U.S.-bound postal services, effective August 25, except for letters/documents and gifts up to USD 100. Refunds offered for affected bookings.
August 25, 2025:
Suspension of India Post’s U.S.-bound parcel services begins. Air carriers stop accepting consignments due to lack of technical readiness.
August 29, 2025:
New U.S. customs duty policy takes effect, imposing duties on all postal shipments except gifts under USD 100.
Ongoing (Post-August 25, 2025):
India Post monitors developments with CBP, USPS, and stakeholders to restore services. No fixed timeline for resumption due to unresolved U.S. regulations.
Effects Impact on Indian Exporters and MSMEs:
E-commerce Disruption:
Indian MSMEs and e-commerce sellers (e.g., on platforms like Etsy, Amazon) face halted shipments, affecting sales of handicrafts, textiles, jewelry, and electronics.
Increased Costs:
From August 29, duties (e.g., 50% for India) raise costs for U.S. customers, potentially reducing demand for Indian goods.
Shift to Private Couriers: Businesses may turn to private couriers (e.g., DHL, FedEx), but these also face compliance challenges, and costs are higher than India Post’s affordable rates.
Impact on Individuals:
Diaspora and Personal Shipments:
Indian diaspora sending parcels (e.g., food items, gifts over USD 100) face delays or cancellations. Only small gifts under USD 100 are viable.
Refunds and Inconvenience:
Customers with booked parcels can claim refunds, but the suspension disrupts personal and family exchanges.
Logistical Challenges:Air Carrier Refusals:
Lack of clarity on duty collection has led air carriers to halt U.S.-bound postal consignments, paralyzing India Post’s operations.
No System in Place:
India Post lacks agreements with agencies to collect duties, and “qualified parties” are undefined, delaying service resumption.
Broader Trade Implications:
Trade Tensions: The U.S.’s 50% tariff on Indian goods (25% base + 25% for Russian oil) exacerbates trade frictions, with the postal suspension adding pressure on bilateral relations.
Global Impact:
The policy affects all countries, disrupting global e-commerce and postal networks. European postal services have taken similar measures.
Economic and Operational Fallout:
Export Volume: India Post’s 100–200 tonnes of monthly U.S.-bound cargo is halted, impacting small exporters and e-commerce revenue.
Potential Workarounds:
India Post is exploring private courier tie-ups, but these are not yet confirmed, and private services face similar duty compliance issues.
Long-Term Uncertainty:
No Clear Timeline: The open-ended suspension depends on U.S. clarifications, which could take weeks or months.
Policy Shift:
The end of the de minimis exemption signals a broader U.S. push to regulate low-value imports, potentially reshaping global postal and e-commerce dynamics.
India Post’s Role:
With 1.65 lakh post offices, India Post is a critical channel for affordable international shipping, especially for MSMEs and individuals. The suspension significantly disrupts this network.
Gift Exemption Clarification:
Gifts under USD 100 must be non-commercial and clearly marked as gifts to qualify for duty-free status. Misdeclared items risk penalties or return.
Private Couriers:
While not explicitly mentioned, private couriers like DHL and FedEx may continue limited services but must comply with the same duty rules, potentially increasing costs.
Critical Perspective:
The U.S. policy, tied to IEEPA, reflects a protectionist stance, possibly targeting Chinese e-commerce but impacting India broadly.
The lack of clear CBP guidelines suggests rushed implementation, leaving global postal systems in limbo.
In short -
Executive Order & Timeline
• Issued by: U.S. Administration
• Order Number: 14324
• Date Signed: July 30, 2025
• Effective Date: August 29, 2025
• India Post Suspension Begins: August 25, 2025
The order withdraws the $800 duty-free de minimis exemption for postal imports.
That means all goods sent to the U.S. via India Post will now attract customs duties, regardless of value
Why the Ban Happened
• The U.S. now requires customs duties on all inbound postal goods
• Duties must be collected by “qualified parties” approved by U.S. Customs and Border Protection (CBP)
• India Post lacks the infrastructure to collect and remit these duties
• Air carriers refused to accept consignments without a duty-collection mechanism
If an Indian private courier company sends a package worth more than $800 to the U.S. without paying customs duty, here’s what happens under Executive Order 14324 and the IEEPA tariff framework:
CBP Enforcement Actions
• Inspection & Hold: CBP scans all incoming parcels. If value > $800 and no duty paid, it’s flagged.
• Notification: Recipient may receive a notice demanding duty payment + possible fines.
• Return to Sender: If duties aren’t paid or courier lacks clearance, package may be returned.
• Seizure or Disposal: In cases of misdeclaration or repeated non-compliance, CBP can seize or destroy the item.
