Amazon And Flipkart Warned By Indian Govt. Over Country Of Origin Rule

It was not long ago that the Indian government had introduced the clause of mentioning the country of origin for products sold on e-commerce platforms.

The government has now issued a warning that sellers on the e-commerce platforms of Amazon.com’s local unit and Walmart’s Flipkart are not complying with the rule requiring that a product’s country of origin be specified.

This new clause and a strict emphasis on its implementation has been indicated by the Indian government in the wake of the border tensions with China after a clash between armies of the two countries at the Himalayan border left 20 Indian soldiers and an unspecified number of Chinese troops dead in June this year. Analysts see this new regulation on e-commerce as an effort of the Indian government to reduce imports of made in China goods.

According to a letter addressed to the two companies from the Ministry of Consumer Affairs on October 16, a time period of 15 days have been given to the two e-commerce companies to explain the lapses or action will be taken against them.

The letter however mentioned nothing about what action the government could take if it was unsatisfied by the explanations from the two companies. The letter only mentions legal action which also includes provisions for imposing fines on the companies. 

There were no comments available on the issue from Amazon and Flipkart.

Since June this year, the Indian government has also banned 177 Chinese mobile applications in addition to enforcing the country of origin rule. New Delhi has also allegedly enforced extra scrutiny, resulting delays, of Chinese goods arriving at Indian ports.

Regulatory challenges in India have often been faced by Amazon. Strict rules for foreign investment in e-commerce were enforced by the Indian government last year which forced the US retail giant to rework its business structures and strained ties between New Delhi and Washington.

An investigation into Amazon and Flipkart was ordered by the Competition Commission of India in January over allegations of violations of competition law and certain discounting practices

According to court filings, the charges are being contested in court by Amazon.

(Adapted form USNews.com)

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