Amid growing clamour for a boycott of Chinese goods, senior officials from the e-commerce sector were called for a meeting by the Department for Promotion of Industry and Internal Trade (DPIIT) this week.

The agenda for the meeting was to get e-commerce firms to display the 'country of origin of the product' on the goods sold on their platforms

Interestingly, e-commerce companies that do not display the country of origin for every product on their platforms are already violating rules that have been in effect since 2018.

This throws up several questions.

Why has the issue surfaced now?

Why has a different government department, which had not framed the existing rules, initiated these discussions?

Why have e-commerce companies not complied so far?

Why were these companies not pulled up for non-compliance?

Let us examine each of these issues.

The Rules

E-commerce companies are already mandated to display the country of origin for every product listed on the platform, as per the Legal Metrology (Packaged Commodities) Amendment Rules, 2017.

The rules mandate that the name of the country of origin or manufacture or assembly in case of imported products be mentioned on the package, and that e-commerce entities have to ensure mandatory declarations on their platforms.

These rules came into effect from January 2018, but several e-commerce companies have been seeking more time to comply, citing the vast array of goods sold on their platforms.

Even today, two and a half years since, not all products on platforms such as Amazon and Flipkart have these details.

Why has the DPIIT then started a separate channel of discussions on this issue?

“There is an existing mandate under the legal metrology rules for e-commerce companies to display the country of origin. We are aware of this. We wanted to start a conversation with the companies on this, and we did not want to start with a stick,” said Ravinder, the joint secretary at DPIIT, who called for the meeting this week.

“We knew there are rules and we want the companies to get it done. We are doing it at our level and are starting the conversation on a positive note,” he said.

Did DPIIT coordinate with the Legal Metrology department, which drafted the rules in the first place?

“We have not had discussions with the Legal Metrology department, but if there are issues that arise, we can take it up with them,“ Ravinder said.

Has the DPIIT instructed e-commerce companies to immediately comply with the rules?

The Joint Secretary said the meeting was not called with the intent to give an order but to discuss the matter with the sector.

“We have asked them that if they have not done so, they should start complying with the rules.," Ravinder said, adding that since there were a large number of products and sellers, the companies needed time.

"E-commerce companies have to go back to sellers to get them to share the detail. All companies were positive about complying. In the next 10-15 days they will evaluate on the technical changes and come back,” Ravinder said.

But why have companies not been pulled up for non-compliance two-and-a-half years after the rules came into effect?

“I have not gone into why companies are not following the rules. We want consumers to have information to know where the products are coming from. As the industries department, our job is to work with them, not against them,” Ravinder said.

Why has the Legal Metrology department not issued any statement on its own rules?

A Legal Metrology official told CNBC-TV 18 that DPIIT has not communicated with them on the issue despite the rules being laid out by the former department.

“Legal Metrology has not received any communication from DPIIT. And how can we communicate, unless they ask? These are rules put down by us,” a senior official said, requesting anonymity.

Why then, have companies been allowed to violate the norms?

“State-level inspectors are constantly checking on compliance,” the legal metrology official said, though adding that there was no central-level data on compliance by companies or on complaints on platforms not displaying the mandated details.

“State-level officials have to enforce these rules,” he said.

Why are e-commerce companies not complying?

In a random check, we found several products on Flipkart and BigBasket with the country of origin mentioned under product details, but there were many listings that did not have the details.

Many products had the address of the manufacturer mentioned, though without the explicit field for the origin of the product.

Amazon did not have the origin of products displayed across many listings.

Amazon, Flipkart and BigBasket did not respond to queries.

Paytm Mall said the company "wholeheartedly supports the government’s decision to promote Make in India and Aatmanirbhar Bharat."

"We have already initiated discussions with our sellers, merchant partners on the next steps to drive this initiative further," the company said.

Many products on Paytm Mall did not have a separate field for ‘country of origin’.

Snapdeal said that it provides a field to sellers to include details relating to the country of origin for the product as part of the listing process.

“Any information submitted by the seller is visible to the users on the platform,” a Snapdeal spokesperson said.

While Snapdeal has an explicit field on the country of origin, sellers have not filled the detail for several listings on the platform.

Sources said that e-commerce companies told the DPIIT Joint Secretary during the meeting that they needed some time to discuss with sellers, check on technical compliance, with some even seeking clarity on the definition of origin of a product.

“The government has to clearly define what they mean by the origin of products, because many products have diverse supply chains through various countries,” said an e-commerce executive who did not wish to be named.

Some e-commerce executives said that even while the field has been enabled at the backend, sellers have chosen not to give the details.

Sellers say most e-commerce companies have created a field in the backend for sellers to enter the country of origin, but they have not made it mandatory.

“The ‘country of origin’ and other declaration fields were introduced in 2018. Currently, sellers are lax in compliance as these fields are optional,” said a spokesperson of the All India Online Vendors Association.

The China factor

One of the reasons that e-commerce companies have chosen to not display the product origin details, as per two industry members, is that it would reveal that a majority of the goods on these platforms were of Chinese-origin.

According to Forrester Research, at least 50 percent of the $32 billion gross merchandise value (GMV) recorded by e-tailing platforms in 2019 came from products that had an origin in China.

“These are largely smartphones and fashion, which are either manufactured in China or have Chinese components,” said Satish Meena, senior forecast analyst at Forrester Resarch.

One industry expert, who did not wish to be named, put the number at nearly 65-70 percent.

“In times like these, e-commerce companies fear a backlash if it becomes known that a lot of products are made in China. They may end up losing orders. This has happened a few times in the past,” said a former executive at an e-commerce company, who did not wish to be named.

Why has the issue surfaced now?

Industry members believe the only reason for the issue to resurface now is the growing anti-China sentiment among the masses.

“This (DPIIT meeting) is just a way for the government to show that they are responding to this sentiment,” said an industry member, who did not wish to be named.

The government this week also made it mandatory for all sellers on its online procurement platform GeM, short for Government E-marketplace, to display the country of origin, and has also reportedly added a ‘Made in India’ filter.

Several industry members believe this is likely a temporary reaction, as it has happened in the past.

But many also feel that the situation with China is more tense than ever, and that companies will be left with no choice but to comply.