The finance ministry is considering collecting duties from buyers during the payment stage of online purchases.
"The government is looking to bring in payment gateways on board on the scheme, and when the consumer pays the money, IGST and customs duty will be included in the price," the Indian daily the Economic Times quoted an official as saying.
Currently, retailers have been misusing the tax rules in which, "gifts" worth Rs.5,000 (around $72) received from abroad are exempted from customs duties.
Last December, local media exposed this route through which Chinese online retailers had been sending products as gifts to customers in India to avoid duties.
Sources revealed the government might also place limits on the existing exemptions limit of Rs. 5,000.
Earlier this month, Shein cancelled orders to Indian customers due to the scrutiny of their business model and import duties by India's customs department.
Mumbai Customs had reportedly seized around 500 Shein parcels as well as parcels from the Club Factory retailer in June this year.
According to a Bloomberg report, courier shipments worth approximately $1450 or less to Mumbai airport fell by 55% in the first quarter of 2019.