With around 27-30% of legacy listings on e-commerce websites such as Amazon and Flipkart not displaying the country of origin, the e-tailers have gotten on the nerves of the government.
Last week, in a clear notice, the Ministry of Consumer Affairs asked the e-tailers to explain the reason for non-compliance in the next 15 days or face action. Ironically, the notice came on the very day the industry was hitting its sale season.
While the e-tailers are working to ensure that the sellers comply with the government's orders, here are a few reasons why that has not happened already and if at all the companies can be penalised for this issue.
While the new listings have started displaying the country of origin, the issue is mostly occurring with the older listings that have been there before the government highlighted this issue in July following the standoff on the India-China border.
The listings are in millions and will take a reasonable amount of time to get updated. It was easier for the companies to make it compulsory for the sellers to add country of origin to the new products being listed. But in order to take care of the already existing or legacy listings a lot of scanning is required.
Also Read: Govt cracks the whip on Amazon, Flipkart for not displaying country of origin during sale season
The second issue is that only the sellers can update the listings and not the marketplace. The e-tailers can at best nudge the sellers. However, currently with the ongoing sale, the focus is on increasing the revenue of the sellers rather than blocking them for non-compliance on this issue.
However, the issue is not just about sellers not mentioning the country of origin. Instead many sellers are reported to have given vague and ambiguous mention of countries as well.
For instance, on Flipkart a product such as an Mi TV is listed stating both China and India as its country of origin with a pointer that it could have originated from one of these countries. So basically, it leaves it for the customers to keep guessing the actual origin of the product.
The idea to highlight the country of origin was to ensure that the consumers take an informed choice at a time when India is having a troubled relationship with its neighbour.
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However in this case, such a declaration does not solve the purpose.
According to a senior executive at one of the companies mentioned above, this happens because of multiple sourcing of a product. So many a times, the product is sourced from a foreign country but is assembled in India. Or also when there is a reseller involved who has bought the product in India but it was originally sourced from a foreign country.
There's not much clarity on these lines from the government so far, according to the person mentioned above.
Now can the government penalise e-tailers for non-compliance?
Legal experts think otherwise.
"Technically, the Legal Metrology Act does not apply to marketplaces but only to manufacturers, sellers, importers etc. While the government can ask etailers to assist in enforcing the law by delisting sellers who are not sharing the country of origin of their products, they cannot be penalised under the Act," said Karan Kalra, founder of law firm Bombay Law Chambers.
While Flipkart began its six-day Big Billion Days (BBD) on October 16, Amazon, for the first time, has announced a month-long Great Indian Festival from October 17.
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