The Union industry department has asked e-commerce companies to tag ‘country of origin’ on all items on their platforms by 30 September, in what could turn out to be a race against time for the online retailers. “We have asked e-commerce players to complete the exercise by 30 September," an official at the Department for Promotion of Industry and Internal Trade (DPIIT) said on condition of anonymity. Initially, the government was keen on a 1 August deadline, but the move was opposed by retailers.
E-commerce firms such as Flipkart wrote to the government that they will need at least six months to finish the process, according to two e-commerce executives aware of the discussions. DPIIT mentioned the deadline only during recent meetings, but there has not been any written communication yet, said one of the two executives cited above, both of whom spoke on condition of anonymity.
“Though the government would like it to be sooner than later, I doubt the 30 September deadline is practical. For new listings, it is possible; but for old listings, much more time is required. Some trade bodies have written that companies would need 6-7 months. Some companies have written that for legacy listings it will be impossible to meet the deadline as in a physical lockdown, it is not possible to access the goods physically and check the country of origin in the packet. We want it to be done quickly, but it is the sellers who have to do it, not platforms.
The problem is sellers are not in those meetings though they have to do 90% of the work," the executive said. Country of origin refers to the country where the item is produced, irrespective of the point of shipping. For example, if a Chinese-made mobile handset is shipped via Vietnam to India, the country of origin will still remain China, not Thailand. The Government e-Marketplace (GeM) portal, which is used by government departments for public procurement, has also made it mandatory for sellers to submit the country of origin while registering new products. Some e-commerce platforms were displaying names of two to three countries as “country of origin" to factor in components sourced from different countries.
However, the first e-commerce executive said DPIIT has clarified that sellers have to display only the country of manufacture of the final product. “The government is conscious to not put a hard deadline since that may lead them to take punitive action against sellers and it might not want to hurt the sentiment for small businesses. It is treating the matter as a work-in-progress since it is a challenge for sellers to source data on legacy listings, and add the ‘country of origin’ tag," the first executive mentioned above said. “A new deadline cannot be issued since adding country of origin to listings is already a law, basis Legal Metrology (Packaged Commodities) Amendment Rules, 2017, and issuing a deadline means that all sellers who were flouting this directive earlier, come clean from a legal standpoint, starting 2017," added the second executive.
As part of its Atma Nirbhar Bharat Abhiyan plank to achieve self-reliance, India is seeking to reduce its over $50 billion trade deficit with China. Though mandating country of origin is not openly targeted against China, the government seems to be riding on the growing sentiment against Chinese products amid the ongoing face-off along the Line of Actual Control (LAC). Chinese imports and investments have been facing intense scrutiny after a tense border standoff that left 20 Indian soldiers and an unspecified number of Chinese troops dead. The DPIIT in April notified changes in its foreign direct investment (FDI) policy by mandating government clearance for all FDI inflows from countries with whom it shares land borders.
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