Govt may tighten 'country of origin' norms for e-commerce players

E-commerce policy expected to be finalised by end of June

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

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 e-commerce space in the country, but also address regulatory challenges in the sector.

While the DPIIT prepared a draft in March, the 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, e-tailers 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 said.

Last year, the government made it compulsory for all vendors selling on marketplaces such as Amazon and Flipkart to specify goods that are imported for sale, to ensure that consumers make an informed choice before purchasing a product on such platforms. The move had come amid tensions at the border between India and China and a rising clamour for boycotting Chinese goods in the country.

“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 told Business Standard.

E-tailers 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.

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, the Confederation of All India Traders (CAIT) had urged Union Commerce and Industry Minister Piyush Goyal to take action against e-commerce behemoths for allegedly violating norms pertaining to the mandatory display of ‘country of origin’.

Another government official said e-commerce companies had started complying with the ‘country of origin’ norms last year. However, the consumer affairs ministry over the last few months has sent a bunch of notices to these companies and asked them to cough up penalties for non-compliance.

There could be more amendments to the Consumer Protection Rules to ensure that e-tailers 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 e-commerce policy is a call that is yet to be taken,” one of the officials said.