The Bureau of Indian Standards (‘BIS’) has issued a draft Indian standard titled ‘E-commerce – Principles and Guidelines for Self-Governance’ (‘Draft Standard’) for public comments.

Draft Standard – Overview

The Draft Standard identifies certain principles, which should be complied with, in the interest of consumers as well as other stakeholders involved in e-commerce operations.

These principles are divided into three phases, details of which are set out below:

i.    Phase 1 – Pre-Transaction Principles – The pre-transaction principles address aspects such as – seller registration, product listing, disclosure of relevant information (regarding products, purchase terms, etc.), etc. Certain pertinent details regarding the principles governing this phase are as follows:

a. E-commerce entities are required to establish the identity of sellers. They need to collect relevant seller details, including – name, registered place of business, details of all branches, details of key managerial personnel, etc.;

b. E-commerce entities are required to establish vigorous know your customer (‘KYC’) processes for all its business partners (including sellers);

c. A checklist of KYC for onboarding sellers is required to be prominently displayed;

d. All relevant details should be provided on the website, including – product details, seller information, price, applicable terms and conditions, return and refund policies, etc. Mode of shipment (such as whether by the seller or by a logistics service provider) should be specified;

e. Customers should be provided an option to filter their search basis the following options – name, category, country of origin, or keyword;

f. Product pages should be reviewed before they are made live;

g. Photos and videos should be in high resolution; and

h. Details of the e-commerce entity itself (such as name, manner of communication with the entity) needs to be provided.

ii.   Phase 2 – Contract Formation Principles – The contract formation principles address aspects such as – explicit consumer consent, review of transactions before completion, providing order information, maintaining transaction records, recurring transactions, etc. Certain pertinent details regarding the principles governing this phase are as follows:

a. When a consumer is required to confirm a transaction, all transaction details should be provided. At this time, consumers should be allowed to edit or cancel the transaction, review details of all charges, returns policy, etc.;

b. Invoice should summarize the details of the order, including – details of the product, total price (with break-up), delivery time and address, logistics service provider, etc.;

c. Return and refund policies should be prominently displayed, and they should include all relevant details such as charges and timelines;

d. Transaction records should be maintained and customers should be able to access their transaction records for such time as required under the applicable law;

e. Effort should be made for making available various kinds of payment methods. Charges associated with a payment method should be disclosed to the customers;

f. If a payment option is owned/ hosted by an e-commerce entity or its affiliates, full transparency must be ensured. Details of relationship and terms of reference between the parties must be prominently displayed;

g. Any changes in recurring charges need to be pre-informed and express consent of the customers must be taken regarding such changes; and

h. Refunds for cash on delivery transactions must be made in the manner opted for by the consumers.

iii.  Phase 3 – Post-Transaction Principles – The post-transaction principles address aspects such as – merchantability, dispute resolution and delivery notification. Certain pertinent details regarding the principles governing this phase are as follows:

a. Clear timelines should be provided for returns and refunds;

b. Timelines for replacement, exchange or returns of counterfeit goods should be over and above the general timelines;

c. Grievance redressal mechanism should be set up in accordance with the consumer protection laws; and

d. Consumers should be duly informed about deliveries, using multiple channels such as SMS, or emails. Tracking information should be provided.

General Principles – In addition to the phase-wise principles, the Draft Standard also provides certain general principles, including:

i.    Prohibition on Sale of Banned Products – During seller onboarding, e-commerce entities should have a ready list of banned products and technology to monitor listings on their websites;

ii.   Data Privacy – E-commerce entities need to comply with applicable data privacy laws. Usage of consumer data for any purpose other than facilitating transactions must be disclosed at a pre-purchase stage and an express consent should be taken from the consumers for such purposes;

iii.  Commercial Communications – Communications sent to customers should be regarding their transactions, or should be sent with their express consent. All non-transactional communications should be on the basis of express opt-in by the customers. Commercial communications include communications sent through various modes, including phone calls, emails, texts and other forms of communication;

iv.   Fair Business Practices – The prescribed practices include:

a. Sellers and consumers should be treated in a fair and non-discriminatory manner;

b. Sellers who are related, associated or affiliated with e-commerce entities cannot sell on the platforms operated by such e-commerce entities;

c. E-commerce entities need to provide open application programming interface which will enable third-party service providers (such as warehouse service providers, logistics service providers, and payment service providers) to register on the e-commerce platforms (thus giving consumers and sellers a range of service providers); and

d. E-commerce entities should not impact the price of products sold on their websites;

v.    Anti-Counterfeiting Measures – E-commerce entities should have processes to combat counterfeits;

vi.   Avoid Unfair Trade Practices – E-commerce entities should not coerce consumers to buy products from a seller, or group of sellers;

vii.  Advertisements – Advertisements should be clearly identifiable;

viii. Correct Representations – E-commerce entities should require sellers to ensure that all content relating to their offerings is accurate. E-commerce entities should undertake periodic review of all sellers and ensure that all representations are authentic and accurate; and

ix.   Customer reviews – Customer reviews should be in accordance with ‘IS 19000 : 2022 Online Customer Reviews – Principles and Requirements for their Collection, Moderation and Publication‘.

Key Observations

The Draft Standard contains overlapping obligations with various existing laws, such as the Consumer Protection Act, 2019, the Legal Metrology Act, 2009 and the foreign direct investment policy. Having said so, there are certain new obligations as well.

Considering so, all entities should examine the contents of the Draft Standard to assess its impact on their operations.

Comments to the Draft Standard can be made until February 15, 2025 (though at some places, the Draft Standard states that the last date of comments is February 20, 2025).