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E- commerce rules – a landmark decision

E- commerce rules – a landmark decision

UPSC CSE Mains Syllabus: GS-3- Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

E- commerce rules – a landmark decision

In news:

  • Online shopping in India, particularly in the FMCG sector, has gained overwhelming prominence since the pandemic.
  • Against this backdrop, the recent rules relating to e-commerce, issued by the ministry of consumer affairs, food and public distribution, under the Consumer Protection Act, 2019, are all the more relevant.
  • The Consumer Protection (E-Commerce) Rules, 2020, regulate all commercial transactions involving goods or services, sold over a digital or electronic network by retailers in India or overseas to consumers in India.
  • The e-com rules currently recognise two e-commerce business models, namely, marketplace model and inventory-based model. While regulating e-commerce entities, the rules have separate specified provisions for marketplace- and inventory-based entities, and for sellers who sell on the platform operated by a marketplace e-commerce entity.


  • It attempts to ensure transparency and boost consumer awareness.
  • The e-com rules require that all information on the return, refund, exchange, warranty and guarantee, delivery and shipment of the goods or services being sold, including their country of origin, be provided on the platform.
  • Such details enable consumers to make an informed decision in their choice of products.
  • The focus on the country of origin requirement is significant, given that India and several other countries are currently re-negotiating their free trade agreements.

Prohibit unfair trade practices:

  • The e-com rules prohibit unfair trade practices by entities and sellers on marketplaces and manipulation of price.
  • The term “unfair trade practice” has been defined quite widely in the Consumer Protection Act to include any unfair method or deceptive practice on the part of the e-commerce entity or seller with the intention of promoting the sale of the commodities being offered.
  • The entities are prohibited from manipulating the price of the goods or services to gain unreasonable profit by imposing unjustified price or charges on consumers.
  • These regulations are crucial, particularly since even essential goods and services are currently on demand given the pandemic.

Grievance redressal – some issues:

  • Both the marketplace entity and sellers are now required to set up a grievance redressal mechanism.
  • Given the sellers on marketplaces range from artisans to large corporations, small businesses may not be in a position to comply.


  • For the sake of consistency and uniformity in quality, it may be preferable to allow smaller organisations to either collectively have a mechanism in place or allow the marketplace entity to coordinate and consolidate such an arrangement.

Other important features:

  • The e-commerceportals will have to set up a robust consumer redressal mechanism as part of the rules under the Consumer Protection Act, 2019. 
  • The e-commerceplatforms also have to acknowledge the receipt of any consumer complaint within 48 hours and redress the complaint within one month from the date of receipt under this Act. And will also have to appoint a grievance officer for consumer grievance redressal. 
  • Where an e-commerceentity offers imported goods or services for sale, it shall mention the name and details of any importer from whom it has purchased such goods or services, or who may be a seller on its platform. 
  • Under the rules, sellers cannot refuse to take back goodsor withdraw services or refuse refunds, if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform. 
  • These rules, are mandatoryand not merely advisories as issued earlier.  
  • The e-commercerules will apply to all electronic retailers offering goods and services to Indian consumers, whether registered in India or overseas.  
  • E-commerceentities that do not comply with the rules will face penal action. 
  • The rules cover marketplaces working as aggregators such as Amazon and Flipkart and inventory-led models where the retailer owns the stocks.
  • This is a landmark provision which will bring about a level playing field in the Ecommerce space as preferential sellers will be impacted.  

Land mark decision: 

  • This is the first timethat such detailed rules have been published by the Government of India for e-commerce 
  • Mentioning the country of origin is equally essential. 
  • This is likely to make the entire E-commerceecosystem in India much more transparent and equal for all stakeholders and most importantly protect the rights and interests of the consumers of India 
  • They clarify the distinct scope of responsibilitiesbetween the marketplace platform and the sellers on the marketplaces. This clarity in law making will help in effective enforcement of these laws and creating an ease of doing business environment
  • Large multinationals are bringing in FDI to fund the losses on account of festive discounts. 
  • Such practices are detrimental for the nation and the Government must implement these e-commerceregulations to put an end to such practice so that the retail trade in India both offline and online can co-exist. 

Source:”Financial Express”.

Possible UPSC Mains Question:

Give insights on the important features of the E – commerce rules. Why do you think it is a landmark decision?