The Indian government recently made it mandatory for e-commerce websites to display the country of origin for all product listings. This new rule aims to provide transparency to online shoppers about where the products they buy are made. Knowing the country of origin is important for customers as it gives them information to make informed purchasing decisions based on factors like quality, pricing, and support of the ‘Make in India’ initiative.
This blog will discuss how this display of country of origin on e-commerce platforms empowers Indian consumers. It provides transparency about the actual origin of products, allowing customers to choose products made in India if they want to support domestic businesses. The rule also aims to curb the sale of fake and low-quality imported goods by enabling customers to identify product origins. Overall, it introduces an important element of transparency for online shoppers in India.
Background and Regulations
In recent times, the Indian government has been pushing to promote locally-made goods and reduce dependence on imports under the Atmanirbhar Bharat initiative. As part of this effort, the country of origin of products is being mandated to help consumers make informed choices.
The Legal Metrology (Packaged Commodities) Rules 2011, under the Legal Metrology Act, 2009, require manufacturers and importers to display the country of origin on product packaging and labels. However, this rule should have been enforced for online marketplaces. In 2018, the rules were amended to include e-commerce entities as well and mandate the display of the country of origin on online listings.
Despite the changes, major e-commerce websites did not uniformly display this information. In 2020, a public interest litigation was filed in the Delhi High Court regarding this issue. In response, the central government told the court that it had directed all e-commerce players to ensure mandatory declaration of country of origin as per the packaging rules.
The Government e-Marketplace (GeM), which is used for public procurement, has also made it compulsory for all sellers on the portal to provide details of their country of origin while registering new products. In July 2022, the Delhi High Court further ordered the government to verify compliance by online retailers.
These policy and regulatory developments aim to promote awareness and locally made goods, which aligns with the Atmanirbhar Bharat vision. Consumers can now make informed choices based on product origin while shopping online.
Benefits for Consumers
With online shopping becoming increasingly popular in India, consumers need transparency about the origin of products they wish to purchase. The new rules regarding the display of country of origin aim to empower consumers with relevant information to make informed choices. Some of the key benefits for consumers are:
Transparency about the country of origin avoids misleading claims: Some sellers could potentially mislead customers by not clearly stating if a product was imported or domestically manufactured. The mandatory disclosure eliminates any ambiguity.
Informed decision making based on quality and price preferences: Consumers can choose products based on their perception of quality from different countries or price preferences. They may also consider after-sales support aspects.
Ability to support Make in India and the local economy: Customers looking to boost the local manufacturing sector now have a way to identify and opt for domestically produced goods over imports. This furthers the Atmanirbhar Bharat vision.
Curbing unethical practices: Explicit declaration of origin prevents sellers from passing off imported goods as Indian-made and discourages malpractices aimed at misleading buyers for commercial gains.
Thus, the rule change brings more transparency to online shopping and empowers consumers to make well-informed product choices based on their requirements, preferences, and priorities. This ultimately strengthens competition and promotes ethical business conduct.
Challenges for Industry
Here are some of the key challenges for the industry in implementing the requirement to display country of origin on e-commerce websites:
Compliance burden on smaller sellers: Smaller sellers may need help updating the country of origin for all their existing product listings by the deadline. Compared to bigger sellers, they have limited resources and manpower. Gathering origin details for old listings and updating them systematically will be a huge task for them.
Lack of clarity for non-packaged goods: The rules currently only require displaying the origin of packaged goods. However, guidance on how to specify the origin of non-packaged items like electronics, furniture, etc., is needed. This leaves ambiguity and challenges in the implementation of such products.
Stakeholder involvement: A phased and consultative approach involving manufacturers, sellers, and industry associations is needed. A unilateral mandate may face resistance. All stakeholders need to be engaged to understand challenges and find workable solutions. Their feedback will help in designing rules that are practical and feasible on the ground.
So, while displaying information on the country of origin is important, overhauling existing listings and systems overnight poses difficulties. A well-planned transition period and process that considers all perspectives is vital for effective implementation.
Way Forward
The government should implement the new rules for displaying country of origin in a phased manner to give e-commerce companies time to comply. A six-month deadline may be given for updating existing product listings, while new listings can show the country of origin from next month.
Technology can help ease compliance. E-commerce sites can develop software that automatically extracts the country of origin from product details. This will ensure accurate information is displayed without extra effort from sellers.
For non-packaged goods where the country of origin is not currently mandated, separate labels or tags can be used on website pages. Standardized tags showing ‘Made in India’ or the foreign country name can empower online shoppers.
Following the due process in rule implementation and leveraging technology for compliance will ensure consumers get transparent product information. Promoting locally made goods in online stores will support the Prime Minister’s vision of a self-reliant India. Knowing the country of origin enables informed shopping, benefiting consumers and domestic businesses.
Conclusion: Mandatory Display of Country of Origin
Displaying the country of origin on e-commerce websites is important for customers and businesses. For customers, it boosts transparency about where products are made. This helps consumers make informed choices that support the local economy. For businesses, especially local manufacturers, online shopping creates trust. Customers are more likely to buy local products when they know the origin. This can boost sales. In the long run, it benefits both sides by growing e-commerce and helping local industries. With the country of origin available, everyone wins - customers get transparency, and businesses get more business.
FAQs
What products are covered under this rule?
The rule applies to all products listed and sold online through e-commerce platforms, including packaged and unpackaged goods.
How will the country of origin be specified?
The manufacturing location must be mentioned on the packaging labels for packaged goods. For others, sellers must provide this information alongside product details online.
What if the origin is from multiple countries?
For products involving multiple countries in manufacturing and assembly, all countries significantly contributing to value addition need to be specified.
What if the origin is unknown to sellers?
In such cases, sellers must mention the origin as ‘unknown’ instead of avoiding the disclosure. E-commerce entities also have a responsibility to verify such claims.
How can consumers check the declared origin?
E-commerce websites must display the country of origin information prominently on their product listing pages so consumers can easily verify it.
What are the penalties for non-compliance?
Non-displaying entities can be penalized under the Legal Metrology Act. Entities providing incorrect country of origin declarations can also face fines and even be blacklisted in serious cases.
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