Govt Slaps 148 Notices To Ecommerce Players For Not Complying With “Country Of Origin” Rule

The Centre has slapped as many as 148 notices on ecommerce players in the past three months for not complying with the mandatory display of the ‘country of origin’ tag on products sold, according to reports.

Following up with the requirement for displaying the country of origin of products available on ecommerce platforms, the government has been cracking down on companies found to be non-compliant. 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.  The ‘country of origin’ rule was also written into the Consumer Protection (Ecommerce) Rules, 2020, notified on July 23.

“Of the 148 notices, 56 have compounded it (the offence) and paid up to INR 34 lakh,” a senior official was quoted as saying by Business Standard. “Every product has to display the country of origin, along with other basic information,” the official added.

According to the Legal Metrology Act, such violations can result in a penalty of up to INR 1 lakh each.

In the case of ecommerce companies, these details have to be clearly displayed on their portals. “Companies are given a chance to explain their case and asked exactly where one can find the product details (online),” the official said.

Last year, the government made it compulsory for all vendors selling on marketplaces such as Amazon and Flipkart to mention the name and details of any importer or seller to help consumers make an informed choice before buying a product.

Some of the existing product listing rules like the Legal Metrology (Packaged Commodities) Rules, 2011, and the Geographical Indications of Goods Registration and Protection Act, 1999, already required the declaration of country of origin for goods.

The Centre is likely to further tighten the ‘country of origin’ norms for ecommerce players in a bid to push the sale of locally produced goods on their platforms through amendments to the Consumer Protection Rules.

The Department for Promotion of Industry and Internal Trade (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.

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 such a framework  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.

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

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.