Etailers May Have To Suggest Indian Alternatives For Foreign-Made Goods Soon

The Centre may tighten the ‘country of origin’ norms for ecommerce players in a bid to push the sale of locally produced goods on their platforms, according to reports. This could be done through amendments to the Consumer Protection Rules, and may find mention in the much-awaited ecommerce policy.

In July 2020, following border skirmishes with China, the Delhi high court had issued notices to Amazon and Flipkart on a plea seeking to display the names of the manufacturing countries for products on their websites.  

According to a Business Standard report, during the second half of 2020, ecommerce and food delivery firms had several meetings with the consumer affairs department as well as officials from the Department for Promotion of Industry and Internal Trade (DPIIT), regarding the addition of the ‘country of origin’ tag to online product listings that was mandated soon after. The ‘country of origin’ rule was also written into the Consumer Protection (Ecommerce) Rules, 2020, notified on July 23.

The DPIIT has been working for the past two years on formulating a comprehensive policy to not only promote a flourishing ecommerce space in the country, but also address regulatory challenges in the sector.

While the DPIIT prepared a draft in March, the new policy is expected to be finalised by the end of this month, a government official said. As far as the ‘country of origin’ tag is concerned, etailers may now have to send a notification and suggest “alternatives” before products are purchased by the consumers to give a fair opportunity to goods manufactured in India, another official was quoted as saying according to the report.

Ecommerce marketplaces may not only have to rank goods, but also have to come up with a framework such that the ranking does not discriminate against domestic goods and sellers, the official added. Last year, the etailers had reached out to the government to request for an extended timeline to implement the country of origin tag and yet they ran afoul of the government.

There could be more amendments to the Consumer Protection Rules to ensure that etailers don’t mislead consumers by manipulating search results on their platforms. Besides, they will have to ensure that marketplaces do not use any information collected through its platform for unfair advantage of its associated enterprises.

“Whether that will be a part of the ecommerce policy is a call that is yet to be taken,” one of the officials said.

The move had come amid tensions at the border between India and China and a rising clamour for boycotting Chinese goods in the country. The ministry of consumer affairs (MCA) had issued notices to ecommerce majors Flipkart and Amazon for not displaying ‘country of origin’ and Amazon was subsequently fined for the same. 

“Some changes are being contemplated in the Consumer Protection (e-commerce) Rules. The final call is yet to be taken,” one of the officials cited above was quoted as saying.

Traders’ associations in the past have urged the government to make it mandatory for e-commerce giants to mention ‘country of origin’ on each and every product sold on their platforms. 

In January 2020, commerce and industries minister Piyush Goyal met a delegation of traders association and assured them that stringent changes will be made to India’s foreign investment (FDI) policy for the ecommerce sector, which are expected to heavily impact Flipkart and Amazon India.