NEW DELHI: The government intends to mandate a new clause in the e-commerce rules to ensure a “level-playing field” between Indian and overseas products and services.
The draft rules, released for public comment on Monday, have proposed that e-tailers identify goods based on the country of origin at the pre-purchase stage and suggest alternatives to ensure “fair opportunity to domestic goods”. They have also been asked to provide ranking parameters in a way that domestic sellers are not discriminated against.
The move has caused some anxiety among e-commerce players but government officials said they only need to provide an explanation on how they rank the products, which consumers can understand easily and there is greater transparency.
“The proposal is not to ban the sale of any imported item. But, they must disclose the country of origin. There are many customers who may want to buy domestic products. The focus of the proposed rules is to keep the consumer informed,” said Nidhi Khare, additional secretary in the consumer affairs ministry.
Although the provision of ranking was introduced in July 2020, the latest move is meant to expand it to end any ambiguity. “There were complaints of e-commerce platforms resorting to opaque mechanisms to push the sale of particular brands. That won’t be allowed,” said an officer.
Government sources indicated that the new rules are meant to ensure that companies which were using algorithms to push certain brands, especially their private labels, as well as entities where they owned a stake do not gain undue advantage.
For instance, the rules propose that related parties or associated enterprises should not be listed as sellers, apart from asking them to ensure that consumer data is not shared with these entities to give them “unfair advantage”. In addition, the associates or related parties cannot do anything that the e-commerce platforms can’t do on their own.
So far, Amazon and Flipkart have refused to comment on the guidelines, although executives suggested that some of the changes will impact their operations.
While some of the companies suggested that the new rules will result in inspector raj, the consumer affairs ministry sought to dispel such fears.
Khare said the government doesn’t propose to regulate or seek disclosure related to flash sales organised by e-commerce companies, while adding that ‘fraudulent’ and ‘back-to-back’ flash sales won’t be allowed as they limit fair competition in trade and make small businesses uncompetitive.