Sellers on e-commerce platforms in India have been struggling for the last one month trying to find 'country of origin' for their products. The new rule has now started to incur losses for them as e-tailers are not allowing listing of products that do not have the tag mentioning its origin.
The Consumer Protection Act, 2019, which came into force on July 20, 2020, has brought in a new regulatory framework, mandating online platforms to display the country of origin of items sold. Rules framed under the Consumer Protection Act, 2019 are now required by law to specify the country where a product is made or assembled.
According to a top executive of an e-commerce platform who did not want to be identified, "The number of products on platforms in the short run has dipped. Not every seller has details like country of origin. Sellers will take some time to adjust with the regulation."
Another executive informed that e-tailers not complying with the rule run the risk of being delisted.
The Centre has defined country of origin as the place where the item is produced irrespective of the point of shipping. So, if a Chinese produced television set is shipped from Thailand to India, the country of origin will still remain China. However, e-commerce firms are allowing sellers the option to list multiple countries as country of origin.
Earlier this month, the Federation of Indian Chambers of Commerce & Industry wrote to the Ministry of Consumer Affairs, seeking up to seven months’ time to comply with the rules.
The Confederation of Indian Industry, too, has written to the Department of Consumer Affairs secretary Leena Nandan, requesting a transition period of eight weeks to permit ecommerce firms to comply with the rules.
Amazon told sellers in an email last month that the country of origin requirement would be mandatory for listing products on its platform and had set August 10 as the deadline for sellers to update their existing listings.
Consumer affairs minister Ram Vilas Paswan had earlier said, “These rules are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on an online platform.”
Paswan said the new law considerably increases “transparency and choices” to empower consumers. The e-commerce rules will apply to all electronic retailers offering goods and services, whether registered in India or abroad, Paswan had said.
The government push to have e-commerce companies name the country of origin beside product listings had come against the backdrop of tensions between India and China following a border skirmish in June that left 20 Indian soldiers dead.
Trader groups have since called for a boycott of Chinese-made products and echoed Prime Minister Narendra Modi’s call for a self-reliant nation.