E-Commerce Sites in India to Face New Product Information Rules

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By Madhur Singh

Online retailers will have to specify a range of details on all products displayed for sale in India under new rules set to take effect Jan. 1.

India’s Ministry of Consumer Affairs, Food and Public Distribution issued rules last month requiring several mandatory declarations, including: the name and address of the manufacturer, packer and importer; the name of the commodity, its net contents and maximum retail price; consumer-care contact details; and country of origin.

“The new rules have been introduced with a view to protect consumer interests, considering the regulators were receiving several complaints with regard to information deficit on online products/goods,” Rabindra Jhunjhunwala, a partner at law firm Khaitan & Co., told Bloomberg BNA July 17 in an email. “The new rules will provide credibility to goods which are sold online.”

The e-commerce market in India, with its large population and low-cost internet services, is forecast to grow rapidly in the next few years. India accounted for less than 1 percent of the world’s e-commerce spending in 2016, but its online retail market is set to grow by 28 percent per year and be worth $63.7bn by 2020, according to international payments business Worldpay.

Although many countries have labeling requirements for online sale, the maximum retail price (MRP) concept is unique to India—it is the highest price that can be charged for a product sold in India and is fixed by the manufacturer. State-level legal metrology departments monitor MRP declarations, and consumers can complain about alleged violations to these departments or to the local, state or federal consumer courts.

Individual online retailers will be responsible for compliance for their sites. For online marketplaces such as Amazon.com Inc. and India’s Flipkart—which provide communication systems over which buyers and sellers meet—the responsibility of making correct declarations would lie with the manufacturers, sellers, dealers, and importers.

The online marketplace would have to observe due diligence as an intermediary under the Information Technology Act, 2000, which permits government agencies and courts to issue take-down notices against websites believed to be violating rules. Under the law, intermediaries must work with the content creator to disable the information at issue within 36 hours of receiving notice.

Under the new rules, action would be taken by the state legal metrology department against the marketplace if it is found to have “conspired or abetted or aided or induced” violation of the rules, or, upon receiving information of violation of the rules on its platform, is found to have failed to act quickly to remove or disable access to violating material “without vitiating the evidence in any manner,” the ministry said in the rules.

To contact the reporter on this story: Madhur Singh in Chandigarh, India, at correspondents@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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