India’s Ministry of Consumer Affairs has issued notices to Walmart-owned Flipkart and Amazon’s local unit, warning that the sellers on their platforms have failed to comply with a rule which requires them to specify their product’s country of origin. The regulatory body has given them 15 days to explain their violations of the rule, or face ‘legal action.’
The ministry said that the e-commerce firms have violated “Section 18 (1) of the Legal Metrology Act 2009 read with and 6(10) of the Legal Metrology (Packaged Commodity) Rules 2011, which is punishable under Section 36 (1) of the Legal Metrology Act, 2009.”
The penalty for the violation is Rs.25,000 for first offense, and Rs.50,000 and/or imprisonment for repeated violations. The punishment will still largely be dependent on how the Government classifies the violations, with the heavier fines being imposed if they are identified as repeated offenses.
Amidst the continued tensions in the India-China border, India has seen several strategic changes, which were largely made in response to the Chinese aggression. For example, New Delhi has banned 177 Chinese mobile apps since June, and Chinese imports have faced increased scrutiny at the ports. The active enforcement of the country of origin rule is one such subtle response, which is part of the push to cut down on imports of Chinese origin.
In July, all e-commerce firms and state governments were informed to ensure that the listed products on these platforms contain information of the country of origin. All the major e-commerce firms have since mandated this specification for their sellers.
But the product listings made prior to the enforcement of the law have been the most difficult obstacles for the e-commerce firms in complying with this rule, as they have to get each seller to update their product listings according to the new regulations.
Yet, the strict enforcement of the country of origin rule is seen as a welcome change, as it will improve the quality of e-commerce platforms by providing the Government information about the origin of the products being sold. Moreover, it will also empower the buyer with more information to choose between products more carefully.