DPIIT to meet e-commerce companies on ‘country of origin’ requirement

Amiti Sen New Delhi | Updated on June 24, 2020 Published on June 24, 2020

Close on the heels of making it mandatory for sellers on the Government e-Market platform to disclose country of origin of their wares, the Department for Promotion of Investment and Internal Trade (DPIIT) has called for consultations with e-commerce companies to decide on how to implement the same for all online players.

Experts say that while it will not be difficult to disclose origin at the product level, if the government wants to take it a step further and do it at the company level, there would be complications.

“It has been decided that the government will try and make it mandatory for all items being sold on e-commerce platforms to clearly mention the ‘country of origin’. The nitty gritty of how to go about it and the level at which the requirement would be introduced has to be finalised. We will hold meetings with e-commerce companies to decide the mechanism for implemention and also the time-line within which it must be achieved,” a senior official told BusinessLine.

The government wants to make it compulsory for all items being sold on e-commerce platforms to flash the country of origin to inform buyers where their purchase is actually coming from. Although, it does not target any particular country, the move is largely being viewed as one that would give buyers a choice of avoiding things from China because of the on-going border conflict with the neighbouring country.

It may be simple to instruct sellers to mention the country of origin of their products on e-commerce websites. on the basis of where they were manufactured, but if the government is more ambitious and wants to do it at a company level there may be problems, say experts.

“At a product level it can be done. For example, a product made in China can easily be labelled that way. However, as a company, it may be more difficult as the company may be already registered or have a legal entity in India,” explained Arpita Mukherjee, Professor, ICRIER, who has been dealing in rules guiding e-commerce companies in India for several years.

For example, there are sub-brands such as Vivo, Oppo and OnePlus in India, where the parent is headquartered in China.

Moreover, there are a number of companies located in ASEAN countries such as Vietnam, Philippines, Singapore, Thailand, Laos and Malaysia, where the majority stake is held by the Chinese, which need to be accounted for.

“If only the country of manufacture is mentioned in the product listing, then items manufactured in Chinese-owned companies located in the ASEAN will pass off as products originating in those countries and not China. The government has to decide whether that would be acceptable,” said another Delhi-based trade and investment expert.

Published on June 24, 2020
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