From August 25, India is set to suspend most of outbound postal services to the US. The action by the Department of Posts — which functions under the Ministry of Communications and runs a network of 1.65 lakh post offices across the country — follows an American executive order that puts an end to duty-free exemption for imported goods valued up to $800, effective August 29. This exemption is officially known as “duty-free de minimis exemption”. This executive order — signed by US President Donald Trump — was issued on July 30.
What is the duty-free de minimis exemption?
This exemption — known as duty free de minimis exemption — refers to a United States rule that permits the entry of goods valued up to $800 to enter American soil without incurring customs duties.
Once this exemption is withdrawn from August 29, the entry of such goods will not be allowed anymore.
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What will happen to these consignments now?
Under the new norms, all shipments to the US will attract customs duties, except for gift items worth up to $100.
“All international postal items destined for the USA, regardless of their value, shall be subject to customs duties as per the country-specific International Emergency Economic Power Act (IEEPA) tariff framework,” said the Ministry of Communications.
The IEEPA law authorises the US president to regulate international commerce and impose economic measures after declaring a national emergency related to an unusual and extraordinary threat to the US.
In other words, it grants the White House more teeth to perform tasks like blocking transactions, seizing assets and regulating trade in order to ensure national security or foreign policy.
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How will the duty be collected?
According to rules laid out by the US Customs and Border Protection (CBP), applicable duties on postal shipments must now be collected and remitted by transport carriers and other ‘qualified parties’.
Air carriers have said they cannot handle US-bound postal consignments after August 25 citing “lack of operational and technical readiness”, according to the ministry.
This is why India Post will stop booking all international postal articles to the US except for letters, documents and gift parcels up to $100.
The Department of Posts said it is working with CBP and the US Postal Service to resolve the issue and restore normal services at the earliest.
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Customers who have booked parcels that can no longer be dispatched will be eligible for a refund of postage, it noted.
