Ministry of Consumer Affairs introduces guidelines for foreign e-commerce cos

With an aim to prevent fraud, biased trade practices and protecting the legitimate rights and  interests of consumers, the Ministry of Consumer Affairs has come up with e-commerce guidelines for consumer protection 2019.

The rules are strictly applied to B2C e-commerce companies, including companies with digital content. However, the ministry has asked the stakeholders to comment on the rules and has given deadline till September 16 for submitting it.

This development comes at a time when Chinese e-commerce websites as Shein, Club Factory, etc are already having a row with the government of India over importing goods to India without paying taxes. Thus, the rules propose that only entities registered in India will be able to carry out ecommerce businesses.

The rules also said that ecommerce entities will not be allowed to influence the prices of products sold on their websites directly or indirectly.

It also makes it mandatory for ecommerce marketplaces to display the legal name, address, website, email address and other contact details of sellers.

The rules also say that marketplaces can be held guilty for contributory or secondary liability in case products they certify as authentic turn out to be counterfeit.

On the sellers front, the guidelines have called for the display of all product details along with health and safety warnings, and provide reasonable delivery terms and be upfront about their policies for returns, exchanges and refunds.

At a time when the government and trader bodies are heavily opposing Chinese ecommerce players in the country, customs officials in Mumbai, Chennai, Bengaluru and Hyderabad have stopped parcels of Shein and Club Factory from entering the country.

A seizure order by the customs department last month showed that a Shein warehouse has been sealed in Mumbai after official found it undervaluing and wrongly declaring goods.

While, at present, free samples, as well as gifts from overseas persons up to the value of INR 5,000, can be received duty-free in India via couriers. Several Chinese ecommerce players such as Shein, ClubFactory have been under-billing their shipments to comply with this rule as well as clear customs duty-free.

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