The Indian Government is cracking down on Alibaba and Chinese e-commerce platforms that are selling goods marked as gifts to avoid customs duties.
The Government has ordered a clampdown on shipments from Chinese e-commerce platforms including AliExpress, Shein and Club Factory that are exploiting loopholes in the country’s regulations.
The government exempts gifts of up to Rs5,000 from the GST duties under its existing regulations. Indian customs officials claim Chinese sellers are marking deliveries as gifts to avoid these duties and reduce the prices.
Indian retailers and domestic e-commerce platforms claim the moves provide an unfair advantage and are calling for the government to impose registrations on foreign e-tailers to ensure duties are paid.
The Times of India reports the government is expected to include the issue in its draft e-commerce policy, which will be released soon.
The crackdown will also include illegal foods and cosmetics which are smuggled into the country.
India's e-commerce market was expected to hit $32.70 bn at the end of 2018 and is forecast to reach $200bn by 2026. The market is being driven by Flipkart, which is backed by Walmart, Paytm and Amazon, which are all investing heavily in the market.