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Aatmanirbhar Bharat Abhiyaan and COO Labelling - A step towards the 'Made in India' vision

To lift the spirits of Indian business people amid the pandemic and in hopes of boosting the economy, Prime Minister Narendra Modi gave the citizens a sliver of motivation through the “Aatmanirbhar Bharat” vision. This new agenda seeks to promote goods produced and manufactured in India, make India self-reliant and transform India into a manufacturing hub.

A Rs. 20 lakh crore economic package has been announced by the Prime Minister in lieu of the ‘Aatmanirbhar Bharat Abhiyaan’ during the corona virus pandemic to aid businesses and prevent an economic crisis. Apart from assisting home businesses in increasing and continuing their production, the Abhiyaan also has an agenda of encouraging buyers to purchase goods made in India and develop trust in home grown products in order to maintain monetary circulation in the economy.

During the lockdown and even after, people have been advised to remain inside their homes to prevent acquiring the virus. As a consequence, and a precautionary measure, e-commerce websites have become an accommodating and favorable marketplace for buyers. In order to help buyers in differentiating between home made and foreign manufactured products, the Government directed e-commerce entities to compulsorily mention the country of origin (“COO”) in the product description and images. The Government aims to create a “nationality bias” among purchasers and hopes for an inclination towards these Indian goods once they are identified.

Even before the Government instructions, the Legal Meteorology (Packaged Commodities) Rules, 2011 (“Rules”) has a provision which requires the declaration of the Country of Origin or Country of Manufacture of the product. The Government e-Marketplace was also asked by the Ministry of Commerce and Industry to adopt the instructions and encourage ‘Made in India’ products.

It became quite evident that the Government was ambitious and serious with the COO labelling when two e-commerce entities were fined on November 4, 2020 according to the Rules for failing to attach the COO label in the product descriptions or images.

The e-commerce entities were asked to pay fines worth Rs. 25,000/- each. The Rules also impose harsh punishments of either a fine of not less that Rs. 50,000/- and not more than Rs. 1,00,000/- or imprisonment up to 1 year.

It is pertinent to note that the Government through multiple legislations has directed e-commerce entities to disclose COO of the products offered for sale on its website. The Government along with the Legal Meteorology (Packaged Commodities) Rules, 2011 also directed in the recently notified Consumer Protection (E-Commerce) Rules, 2020 for disclosure of COO of the products.

It cannot be disputed that the ‘Aatmanirbhar Bharat Abhiyaan’ and the ‘Made in India’ policy have benign intentions and are formulated to protect Indian businesses but some e-commerce entities have raised concerns regarding the practicality of the policies in general. Even though there has been an overwhelming response from multiple e-commerce entities in support of this move, no material changes have been observed. In practice, these entities have exhibited reluctance in modifying descriptions of old listings that already exist on their websites. It remains to be seen whether these entities will stand ground or give in to the requirements laid down by the government and modify their old listings in order to escape penalties.

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