India Suspends Most US-Bound Postal Services Amid Escalating Tariff Dispute
India's Department of Posts has temporarily suspended most postal services to the United States from August 25, a direct response to new US customs rules eliminating duty-free exemptions. The move comes amid a broader trade dispute, with the Trump administration imposing steep tariffs on Indian goods. While letters and small gifts are exempt, the suspension impacts e-commerce and other commercial shipments, signaling a significant downturn in economic relations between the two countries and affecting countless small businesses.
Unpacked:
The US withdrew the duty-free exemption via Executive Order No. 14324 as part of a broader effort to tighten customs controls and in the context of escalating trade tensions with India, including recent tariffs imposed by the Trump administration on Indian goods and penalties related to India's purchase of Russian oil.
The suspension restricts the shipment of goods and commercial parcels to the US, severely disrupting Indian e-commerce companies' ability to serve US customers. Many small businesses that rely on affordable postal channels for exports face loss of revenue and operational challenges, as alternatives like private couriers are often more expensive.
Yes. Letters, documents, and gift items valued up to $100 remain exempt and can still be sent to the US. All other items, including commercial shipments and higher-value parcels, are suspended until further notice.
Key issues include a lack of clarity on how duties are to be collected on postal items, as US-bound carriers and postal operators are not yet prepared to process and remit these duties. Guidelines from US Customs and Border Protection are still being finalized, and the operational mechanisms for compliance are pending.