Ecommerce Companies Want Six Month Extension To Comply With ‘Country Of Origin’ Rule

Ecommerce industry associations have sought another 6-7 months extension from the government to comply with the new consumer protection rules. The mandatory listing of ‘country of origin’ for products listed on ecommerce websites is one of the main rules to be followed. Other key provisions include the appointment of grievance offers and resolution of consumer complaints within one month of receiving the complaint, among other such provisions. 

The Consumer Protection (Ecommerce) Rules, 2020, were notified on July 23 and came into effect immediately. The Rules are applicable to all goods and services, bought or sold over digital or electronic networks, including digital products. As such, even companies providing internet services such as online ticketing and hotel booking, are defined as ecommerce entities and subject to the new rules. 

Reportedly, the Federation of Indian Chambers of Commerce and Industry (FICC) wrote to the Ministry of Consumer Affairs earlier this month, asking for six to seven months time for complying with the new rules. 

“Some of these requirements will put undue stress on MSME sellers who already have their backs up against the wall due to excessive compliances that come with selling online,” a senior executive at an e-commerce firm told Economic Times. 

The new rules also apply to overseas-based ecommerce entities supplying goods and services to Indian customers.

Last month, the DPIIT had proposed August 1 as the deadline for etailers to display ‘country of origin’ information for all products being retailed on their website. In response, ecommerce companies Amazon and Flipkart sought more time, saying that a hastened deadline would harm small sellers, who may be unsure about ways of complying with the new rules. Later in the same month, Amazon, in a letter to its sellers, asked them to provide ‘country of origin’ information for products by August 10. 

According to the new consumer protection rules for etailers, failure to abide by them would attract penalties as per the recently ratified Consumer Protection Act (CPA), 2019. 

The CPA mandates every ecommerce entity to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment and grievance redressal mechanism, among other things to enable the consumer to make an informed decision. Further, the Act also calls upon ecommerce entities to provide ‘country of origin’ information for all products. The ‘country of origin’ clause has attracted a lot of attention in the wake of anti-China sentiment in the country and the resultant call to reduce dependency on imports.

There is some confusion regarding the timeline for the implementation of the ‘country of origin’ provision in the new rules. “DPIIT conducted stakeholder participation in early July 2020 and the proposed timeline indicated by DPIIT to the participant brands/platforms for displaying ‘country of origin’ was August 1, 2020 (for any new products/items) and October 1, 2020 (for any legacy products/items) however, the Ecommerce Rules do not clarify this,” Kaushalya Venkataraman, partner, Chandhiok & Mahajan Advocates and Solicitors told Inc42.