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Business trends

India lays down rules for online services to protect consumers

Guidelines already cover goods but government widens remit to prevent fraud

Morgan Stanley said in a February report that e-commerce in India is set to reach $230 billion by 2028.   © Reuters

BANGALORE -- India has widened its e-commerce guidelines to protect consumers to include services such as video streaming, online ticket booking and ride-hailing, from covering just online retailers previously, local media Economic Times reported.

According to a senior official from the consumer affairs ministry, the preliminary draft published last month is being revised and will be posted again to elicit public views.

"While there's not too much ambiguity on the product side, on the services front there are many different sectors we will have to take into account," the official was quoted as saying. The revised draft may propose "specific rules for different online services as problems consumers face are quite different between services," the official told Economic Times.

First released on Aug. 2, the guidelines seek to protect "personally identifiable information" of consumers and curb unfair trade practices that may directly or indirectly influence the price of the goods or services to maintain a level playing field.

The Ministry of Consumer Affairs initially sought comments from stakeholders by Sept. 16 but has now extended the deadline to Oct. 31.

Under the new guidelines, e-commerce companies will be required to submit a self-declaration regarding compliance to the ministry. To ensure the veracity of the sellers listed on platforms, e-tailers will have to display their details including the legal identity of their businesses, websites, email addresses and contact information.

E-commerce companies will have to give consumers 14 days to return or ask for an exchange of goods. They must also have a complaints process in place. The draft also stipulates that the promoter of the e-commerce website must not have been convicted of any criminal offense punishable by imprisonment over the last five years.

LocalCircles, an online platform for consumer feedback which works with several government departments, conducted a survey recently to identify online services that consumers would like the e-commerce guidelines to cover.

Sachin Taparia, founder of LocalCircles, said it received over 63,000 responses from the public that identified 15 online services that should be included in the draft policy. The list includes pharmacies, online groceries, food delivery, carpooling, payments, accommodation, content, resale, ticketing and gaming, among others.

"Some of the issues faced by consumers on e-commerce services include nondisclosure of convenience fee by travel or event ticketing apps, medicines on e-pharmacy apps not showing best before dates, last-minute ride cancellations by drivers, home maintenance service worker committing theft, among others," Taparia said.

Taparia said LocalCircles has submitted these findings to the Ministry of Consumer Affairs to take into consideration for the guidelines.

According to a February 2019 Morgan Stanley report, India is adding one internet user every three seconds and the e-commerce sector in the country is set to reach $230 billion by 2028.

KrASIA is a digital media company focused on technology-driven businesses and trends across the Asia-Pacific region. It is part of 36Kr, a tech news portal based in Beijing. Nikkei has a minority stake in 36Kr.

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