In India, the department for promotion of industry and internal trade (DPIIT) has asked e-commerce platforms to display “the country of origin” on new products listed on their websites, possibly by August 1, with legacy items by October 1, without stipulating a hard deadline. But retailers believe the target date is challenging and unrealistic. Thus far, this was only a consultation between DPIIT and 30 e-commerce platforms. Analysts expect the government to decide soon on the boundaries of the relevant legal provisions. The initiative is seen as India’s latest move to curb imports from China amid public calls to boycott Chinese goods after fatal border clashes in which 20 Indian troops were killed.
Despite increasing tensions with China, if India’s government implements the policy, it would mainly create new hurdles for smaller online sellers that are already struggling because of the COVID-19 outbreak. Under the new legislation, SMEs would have to cope with the increasing weight of regulatory obligations. Evidently, this would increase their expenses and reduce their net profit margins. Furthermore, it opens some high-risk businesses and desperate sellers to common problems like fraud, bribery, and corruption. In addition, the policy urges e-commerce platforms to implement the changes, but it fails to acknowledge that the burden will fall mostly on manufacturers, sellers, and SMEs. These industry players are already struggling to operate effectively because of the anticipated global recession and the COVID-19 pandemic; thus, a return to offline is not feasible since consumers are still staying away from brick-and-mortar stores as the crisis continues.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.