In a multilateral forum, the rules of origin in trade in services are largely underdeveloped. The government has shown an interest in the development of origin rules in trade to prevent trade deflection and limit third party access. There can be several ways of establishing the origin of goods and services in trade. The nationality of the service provider or service is a very eminent criterion that can establish the origin of services. Identification of nationality of the concerned good or services not only plays a crucial part in regulating market access and law enforcement but also helps in navigating international trade.
For the past 5 years, regulation of e-commerce has been a major concern, and various industry-specific laws have been drafted and proposed by the Legislature. However, these laws are still confusing when read with various court orders. The demand for specifying the country of origin gained prominence due to the new initiatives like ‘Atma Nirbhar Bharat’ and ‘Make in India‘. The Government e-Marketplace has been made an important part of these initiatives. The concerns relating to displaying the origin of the product discussed with various E-Commerce Giants and this meeting lead to a policy that makes it mandatory for listed sellers to specify the country of origin.
Country of listing
For multinational brands, the country of origin can include multiple countries that refer to the value creation process. Though there have been Indian laws and regulations that talk about statutory provisions regarding the declaration of country of origin or country of manufacture on the products but no law discusses the display and disclosure of country of origin on the seller’s website.
According to the Legal Metrology (Packaged Commodities) Rules, 2011 the declaration of country of origin or country of manufacture or assembly on the imported products is required. This is to stop false and misleading claims that deceive the consumers and customers and provide them with complete information about the product. The Geographical Indications of Goods Registration and Protection Act, 1999 also talks about the requirement of the indication of the country or place in which they are produced or the name and address of the manufacturer under Section 71. Section 23 of the General Clauses Act, 1986 refers to the issuance of notification and making of the rule or by-law. The notification under Section 71 will not apply to goods that are imported into India and are approved by The Commissioner of customs who has allowed transit through India.
Objectives of marking country of origin
There are many objectives behind making the marking of the country of origin compulsory. Falsification of the mark is the major reason why the country of origin should be marked as this will prevent passing locally manufactured goods as imported goods. It would also promote localization as local identity is not required to enforce Indian laws. Marking country of origin will also keep the parallel importation of the goods to the domestic market in check. Product valuation and product purchase decisions are also made with reference to the country of origin. However, this rule will also hamper the progress of smaller sellers as such compliance issues in selling goods online will affect their business in the pandemic.
Under the Information Technology (IT) act and consumer protection e-Commerce rules, the intermediary guidelines provided for mentioning localization by the foreign marketplaces. The digital platform provides an opportunity for buyers to discover products systematically. A notice was issued by Delhi High Court to the central government regarding the implementation of the Legal Metrology Act, 2009, and the rules framed under the act. These rules make the displaying of country of origin of the products sold on E-Commerce websites mandatory.
The Legal Metrology packaged commodity rules 2017
Under these rules, any packaged commodity consumed by the citizens should contain a detailed description of the package. The details must include a description of quantity, date of manufacturing, expiry date, weight, statutory warning, etc. These rules were drafted by the legislature to ensure that there are awareness and information available to the consumer buying the product. The information provided keeps the fraudulent businesses in check so that dangerous products are not sold in the market. The country of origin is also to be mentioned on the package and the address of the place if the manufacturer is Indian is to be provided with a pin code. The E-Commerce businesses are also included in the amendment of 2017 and these entities should follow the mandatory declaration except for the date of manufacture or packaging. It is the responsibility of the service provider in e-commerce businesses to obtain the list of details of the seller. If there is any violation of these guidelines, a penalty can also be imposed. The new amendment is inclusive of the metric related devices.
The businesses have mentioned that they need time to comply with the rules. Till that time, no product would be banned from selling. The main objective behind mentioning the country of origin is to help consumers in making informed choices. The portal used by government departments for procurement of goods known as Government e-Marketplace has also made it mandatory for the sellers on the platform to mention the country of origin during the registration of the products.
Government E-Marketplace was initiated to move a step forward towards Atma Nirbhar Bharat. The seller is required to enter the name of the country of origin to register the new products on the government e-marketplace compulsorily. The initiative also provides for a provision that will indicate the percentage of local content in products. The initiative was in the view to promote ‘Make in India’. The seller needs to update the country of origin regularly so that their product won’t be removed from the platform for lack of update. The portal facilitates the entry of small local sellers in the market easily. The public procurement norm was modified by the government so that the companies whose goods and services have a 50% local content were given maximum preference. This move aimed to make the country self-reliant and promote Make in India. Government e-Marketplace also provides for additional features like a search engine and faster creation of categories for goods and services. The tribal communities are also provided an opportunity by this portal to make the product manufactured by them available for purchase. These include paintings, handmade showpieces, statues, etc. for public procurement. The services listed on the portal include transportation, logistics, waste management, automobiles, office stationery, etc.
Flipkart and Amazon
The Government of India has issued notice to Flipkart and Amazon for not displaying the information which includes country of origin on the products that are sold on the platforms in India. The notices have been sent by the Department of Consumer Affairs, Ministry of Consumer Affairs, and Food and Public Distribution regarding non -compliance. The government has sought a reply from these platforms and in case of no sufficient explanation and action would be initiated against them according to the acts and rules.
Since entering the details about the country of origin is a huge task that involves gathering data and feeding it into E-Commerce Marketplace, the display of principal display panel image would be a better choice that would provide all the information about the item including country of origin and net contents. The State Governments were also passed by the Consumer Affairs Minister to enforce the providence which requires E-Commerce players to display the country of origin on all the products and services. The rules say that the country of origin should be mentioned on all items being sold by September 30th, 2020.
The listing of the country of origin is the government’s part of the plan of curbing imports from countries like China because of the rift caused due to border tensions. The feasibility of the move is questionable as there is a lack of clarity in the Legal Metrology (Packaged Commodities) Rules. Also, issues such as coronavirus have hit micro, small, and medium enterprises hard and there are several technological hurdles in implementing the requirements of the rules. The timelines that are given by the government also make it harder to implement. The new listings are required to be completed first and then the updating of the existing listing should be done. This move will also put offline sellers in an advantaged position.
The pharmaceutical companies are entitled to some specific exemptions under the Packaged Commodity Law. The importance of measuring the country of origin also depends on the information that the consumer has about the product that he wants to purchase. The intention of the Legislature is to protect the consumers in the platforms where the seller is not physically available. A model with basic principles of law is required where the self-regulatory bodies that create special laws revolving around a certain kind of institution.
ABOUT THE AUTHOR
Sneha Tripathi is a fourth is law student at Hidayatullah National Law University, Raipur.
In Content Picture: Picpedia.org
Kindly note that the views and opinions expressed are of the author and not of the Indian Journal of Law and Public Policy.