Amazon India To Meet Govt Officials Over ‘Country Of Origin’ Penalty

After having received multiple notices from the Indian government for violating the ‘country of origin’ norms, the ecommerce giant Amazon’s executives are expected to meet with the government officials from the Consumer Affairs Ministry early next week (January 11), seeking an exemption from paying the fine for not following the rules. 

This development comes after Delhi HC last month had asked the centre to verify if the ecommerce players like Amazon, Flipkart and Snapdeal were displaying the ‘country of origin’ for products. 

In November, consumer affairs ministry had also issued notices to ecommerce companies for not displaying mandatory information, including the country of origin of products sold on its platforms. Amazon was slapped with a penalty of INR 25K for not abiding the rules. However, Flipkart was not fined, a senior official of the ministry said.

Prior to this, the Delhi HC had also issued a notice to the government asking for responses on a petition filed by Dhruv Sethi, which challenges a provision in the Consumer Protection (ecommerce) Rules that mandates all ecommerce entities to be registered as a company in India. 

At the time, ecommerce companies, including Amazon, Flipkart and others had sought an extension of six to seven months from the government to comply with the ecommerce rules, 2020, which was notified on July 23, 2020.

According to the rule, the ecommerce entities have to do the mandatory listing of ‘country of origin; for products listed on its websites. A senior executive at an ecommerce company had told Economic Times that some requirements mentioned would put undue stress on MSME sellers who already have their backs up against the wall due to excessive compliances that come with selling online.  

The Department of Promotion of Industry and Internal Trade had announced September 30, 2020 as the deadline for ecommerce companies to complete assigning ‘country of origin’ tags to both new and existing items on their platform.

It is said that over 70% of the listings on the marketplace comply with the government rule, however, it is the remaining 27-30% of legacy listing players like Amazon and Flipkart who are not showing the display of the country of origin, as reported by Moneycontrol. The government official as quoted in the report stated that if the compliance has not been made even for a single item on the website, then the rule is broken. 

In addition to this, trader’s body CAIT had written to Prime Minister Narendra Modi, seeking authorities to regulate ecommerce in India. Also, it had accused ecommerce major Amazon of violating Foreign Direct Investment (FDI) Policy and Foreign Exchange Management Act (FEMA) norms. The secretary-general of CAIT had accused the commerce giant of conducting multi-brand retail activities in India and demanded action and imposition of the maximum penalty for the same. 

However, Amazon had denied the allegations and said that it complies with the FDI laws and seeks regularly approvals, including from the Competition Commission of India (CCI).