The government has asked ecommerce platforms such as Amazon and Flipkart to display the country of origin on new products listed by sellers on their sites by August 1 and legacy items by October 1 without stipulating a deadline. The companies sought more time to implement the changes, which are part of the government’s plan to curb imports, at an online meeting with officials on Wednesday.
The platforms said the measures should be introduced in a phased manner with the involvement of manufacturers and sellers in the process, said people with knowledge of the matter. The government will take a call on the final deadline soon, an official said.
Under the current law, there is no requirement to display country of origin on non-packaged goods. The Department for Promotion of Industry and Internal Trade (DPIIT) will discuss introduction of the relevant legal provisions with the consumer affairs ministry on listing such information, said the people cited above. “No decision was taken — it was only a consultation and follow-up of the previous meeting. A deadline will be decided later because packaging issues come under the consumer affairs ministry,” said a government official aware of the details.
While Flipkart is understood to have suggested a deadline of August 15 to implement the required backend changes, Amazon sought 2-3 months for the same, people present in the online meeting told ET. “The government wants that new listings be updated by August 1 and the old ones by October 1 but it was decided that work on the new ones must begin as soon as possible,” said a company official after the virtual meeting with ecommerce companies.
Representatives of as many as 30 ecommerce sites including Amazon, Flipkart, Jio, Shoppers Stop, Croma, Snapdeal, Lenskart, Paytm, Grofers, Tata Cliq, Pharmeasy, 1MG, HomeShop 18, Swiggy, Zomato and Medikabazaar attended the call. The companies raised points related to the feasibility of the move and lack of clarity in the Legal Metrology (Packaged Commodity) Rules as they sought more time. At a meeting last month, the companies had said that displaying these details was feasible but on Wednesday, they flagged issues such as Covid-19 having hit MSMEs and technological hurdles in implementing requirements.
“Since most companies said it was not feasible to implement this within the timelines set by DPIIT, they’ve asked us to start working on introducing country of origin for all new listings ASAP, and said they will come back to us in a few days’ time after discussing with consumer affairs for updating existing listings,” said a senior executive of an ecommerce company who was part of the discussion.
Following the feedback, the government is also likely to review the Legal Metrology (Packaged Commodity) Rules that govern prepackaged commodities and cover declarations about country of origin, date of manufacture, quantity, expiry date and manufacturer’s details among other information about the product. Some executives said the move will put online sellers at a disadvantage, benefiting offline ones.
“Participants said that sellers can only reproduce what is on the package and the government needs to rope in manufacturers if they want details on value addition such as photograph of the label showing origin, assembly and other details,” said the person cited above. E-pharma companies told the DPIIT that drugmakers had specific exemptions under the packaged commodity law.
“We told the DPIIT that the compliance burden for this was on manufacturers and sellers, who weren’t in the room,” said an executive, underscoring the limitations of such platforms. “Tech enablement is something we can do, and have already been doing for the past few weeks.” Ecommerce players want phased compliance for display of country of origin on goods and said manufacturers should also be brought on board to help comply with the government’s requirements.
Some participants said smaller sellers will be worse hit due to increased compliance pressure, especially at a time when they are having trouble selling offline because of Covid-19 and other reasons and are looking to drive more of their businesses online. Another executive with an ecommerce platform said that 90% of the listings can become compliant with the new rule by the end of July, but smaller ones will find it difficult.