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Tuesday, July 07, 2020

E-comm firms told: Let buyers know country of origin of goods

Experts say such a requirement does not have a precedent, may not be easy to roll out and may require more brainstorming, especially for products, such as cellphones and laptops, that may have inputs from several countries.

Written by Prabha Raghavan , Pranav Mukul | New Delhi | Updated: June 25, 2020 7:12:51 am
online shopping, shopping apps, shopping on mobiles, retail shopping, indian express, indian express news The DPIIT had called the platforms since they needed to work out the modalities through discussions with sellers, said another senior official.

THE DEPARTMENT for Promotion of Industry and Internal Trade (DPIIT) Wednesday directed e-commerce firms to work out a mechanism that will enable customers to identify the country of origin for all products displayed on their platforms, The Indian Express has learnt.

The direction was conveyed during a meeting with representatives of 20 firms, including Amazon, Flipkart, Paytm and Pepperfry, following which the platforms sought around 10 days to work out a system, according to senior officials and executives.

Another meeting with the firms is expected to take place soon, possibly within a week or 10 days, to take stock of the measures, executives close to the development said.

Experts say such a requirement does not have a precedent, may not be easy to roll out and may require more brainstorming, especially for products, such as cellphones and laptops, that may have inputs from several countries.

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The development comes against the backdrop of the border face-off with China and the central government pushing for self-reliance through its Atmanirbhar Bharat campaign. It also follows the Commerce Ministry’s announcement Tuesday that sellers on the government’s e-marketplace (GeM Portal) will have to disclose the country of origin for products.

Wednesday’s meeting also involved firms like 1mg, Myntra, JioMart, Bigbasket and Shopclues, said sources. “It will be difficult to get it rolling with the urgency that the government seemed to be pushing it with because there are thousands of products on our platform,” said an e-commerce executive.

Another executive said the responsibility of providing accurate information was with the sellers and not the marketplace, which can only educate them about complying with the law of the land.

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“This was the first meeting to understand what exactly they (e-commerce firms) would require. This is very preliminary, because this is the first time we have taken this up with them and they needed some time to assess,” said a senior government official.

“More meetings will be held with the platforms, but no dates have been fixed. Normally, the most important aspect of any free market is the customer’s choice when deciding what to buy. Here, information becomes a crucial aspect,” said the official.

The DPIIT had called the platforms since they needed to work out the modalities through discussions with sellers, said another senior official. “There is no prohibition or restriction. This is basically to help the customer know whether they are buying a product made in India, if they want to, and the focus of the discussion was on how it can be done,” said the official.

According to e-commerce executives, the proposal had been discussed in earlier meetings but the government “seemed insistent” on having it done this time.

Various online retailers have already represented to the DPIIT that they would need time to finalise technical modalities. And some experts anticipate that the implementation may be “tricky”.

“It will be tricky to calculate the value added of a product sold on such a medium. No protocols have been developed yet for this in the e-commerce space in any country so far, so I’m not sure how it will be done,” said Rajat Kathuria, Director and Chief Executive, Indian Council for Research on International Economic Relations (ICRIER).

“Even in existing free trade agreements, the rules of origin are agreed upon over many years of tough and extensive negotiations. Even then, it’s been a controversial issue,” he said.

“Nowadays, one product is usually produced through the value addition of multiple different countries. Even those products assembled in India have components from several countries, so how the country of origin will be worked out will have to be seen,” said Biswajit Dhar, professor at JNU’s Centre for Economic Studies and Planning. “Perhaps, an additional labelling requirement would have to be imposed in this situation.”

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The DPIIT’s meeting comes nearly 10 days after the Confederation of All Indian Traders (CAIT) approached Commerce Minister Piyush Goyal to make the origin tag mandatory for private e-commerce firms.

The decision would be “crucial” in CAIT’s “Boycott Chinese Goods” campaign, said the group’s secretary general, Praveen Khandelwal. Around 70 percent of goods sold on various e-commerce portals are Chinese, according to him. “When the government can implement the decision on its GeM portal, why can’t the e-commerce companies do it?” said Khandelwal.

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