India introduces tough new rules for eCommerce platforms - country of origin a must

(Image credit: Flipkart)

Update (July 25, 2020): 

The new rules were notified and came into force since Friday. Accordingly, now country of origin is a must on all imported goods and services sold on eCommerce markets, and failure to comply would attract penal provisions. The new rules would be applicable to all the e-marketplaces operating in India, whether they're registered locally or overseas. 

The new rules restrict all inventory-based eCommerce entities from "falsely representing themselves as consumers to post reviews about goods and services or misrepresent in any form the quality or features of these goods and services."

India's eCommerce industry is gearing up for a set of new regulations that could be put in place as early as next week. Though most of the new rules would revolve around matters related to consumer protection, there is a mandatory provision of mentioning country of origin on imports. 

A senior minister of the federal government in New Delhi said these new provisions were part of the Consumer Protection (E-commerce) Rules, 2020, that are part of a consumer protection law notified a few days back. Under the rules, all eCommerce platforms would be setting up a robust consumer redress mechanism.

The federal minister for Consumer Affairs Ram Vilas Paswan said eCommerce platforms would have to provide details around their policies of return, refund, exchange, warranties, delivery and shipment as well as modes of payment. It would also have to clearly define a grievance redress mechanism, charge-back options and payment security guidelines. 

The minister said that platform such as Amazon, Flipkart and the newly initiated Jio Mart would have to mention country-of-origin so that consumers could make an informed decision at the pre-purchase stage. However, a government affidavit in a Delhi court clarified that such labels would be necessary only in the case of imported products.  

A confusing signal? Not really

In response to a public interest petition in the Delhi High Court, the federal government clarified that declaration of the country of origin on pre-packaged commodities used by eCommerce sites was mandatory only in the case of imported products. 

"The declaration of country of origin on the pre-packaged commodity or on the digital and electronic network used for e-commerce transactions is required in case of an imported product and if the product is manufactured indigenously, country of origin may not be mentioned on the product," according to the affidavit, a report by news agency ANI said. 

The affidavit was the government's response to a lawsuit filed by a complainant who claimed that the Legal Metrology (Packaged Commodities) Rules of 2011 was amended to include the country of origin or manufacture on eCommerce websites, but was never enforced. 

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Country of origin only for imports

The lawsuit had named eCommerce giants Flipkart, Amazon and Snapdeal as parties to the case. In its submission, Snapdeal had termed the requirements as "onerous and unnecessary" and pleaded that increasing the compliance would add to the burden of eCommerce platforms that were already facing tough times due to the poor economic activity caused by Covid-19. 

The draft rules for eCommerce platforms said where an eCommerce entity offers imported goods or services on sale, it must mention the name and details of any importer from whom it has purchased such goods or services, or who may be a seller on the platform. 

Additionally, eCommerce platforms would now have to acknowledge receipt of consumer complaints within 48 hours and redress the same within one month from that date. They would also have to appoint a grievance officer in their organizations. 

The minister also clarified that these rules, when announced formally, would be mandatory in nature and not mere advisories as was the case earlier. This is the first time that India has come out with such detailed rules and regulations around eCommerce companies.

Raj Narayan

A media veteran who turned a gadget lover fairly recently. An early adopter of Apple products, Raj has an insatiable curiosity for facts and figures which he puts to use in research. He engages in active sport and retreats to his farm during his spare time.