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The punishment for violation is not clear yet, and the larger impact on the sector will emerge in the next few months. (Ramesh Pathania/Mint)
The punishment for violation is not clear yet, and the larger impact on the sector will emerge in the next few months. (Ramesh Pathania/Mint)

E-tailers scramble to add country of origin tag

  • The Centre has defined country of origin as the place where the item is produced irrespective of the point of shipping
  • The compliance pressure and financial impact on online sellers are harsher because if they don’t comply, they could get delisted

Tracing the country of origin for millions of products and tagging them as such is turning out to be a nightmare for Indian e-commerce firms, as hundreds of thousands of sellers struggle to provide details.

E-tailers such as Flipkart, Snapdeal and Paytm Mall are not allowing sellers to list new products if they don’t mention ‘country of origin’, as mandated by the government recently, according to four people aware of the matter.

The compliance pressure and financial impact on online sellers are harsher because if they don’t comply, they could get delisted. The punishment for violation is not clear yet, and the larger impact on the sector will emerge in the next few months.

In July, lawyer Amit Shukla moved the Delhi high court to seek implementation of the Legal Metrology Act, 2009, which also mandated displaying country of origin on products sold online.

“The government doesn’t want to give a timeline to implement this, as it could adversely affect the seller and e-commerce ecosystem. But, now, since this is a legal case, it will also mean a formal route will be charted for punishing the non-compliant sellers," said a top executive of an e-commerce firm, who didn’t want to be named.

If push comes to shove, the government may even ask e-tailers to delist inventory, leading to a dip of 15% in listed goods on online platforms, the executive said, adding the government might use Legal Metrology (Packaged Commodities) Amendment Rules, 2017 to penalize errant sellers.

An industry department official said though the country of origin has been made mandatory under the packaging guidelines issued by the consumer affairs department, full compliance may take time.

“Making it mandatory and implementing it are two different things. E-commerce companies have started implementing it," he added.

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. An e-commerce executive said there are several parts made in various countries for many products.

Flipkart and Amazon India didn’t respond to queries.

In a bid to promote Indian products, the Department for Promotion of Industry and Internal Trade (DPIIT), along with Department of Consumer Affairs will meet e-commerce firms this week to include a Geographic Indications (GI) logo on products made in India.

Over the past month, Flipkart and Amazon India have begun listing the country of origin for new products, but the same for existing inventory will take longer. “It’s going to be tough for sellers and compliance is a big issue. Products come in different shipments from different locations in batches," said a person familiar with the process.

“This move is challenging, and the government has to clarify who has ownership of putting the tag. It is usually the brand or the trade label, and the final seller shouldn’t be punished for this," said Ankur Bisen, senior vice president, retail and consumer, Technopak, a management consulting firm.

Madhurima Nandy contributed to the story.

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