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India needs a law to protect interests of online consumers

The Consumer Protection Bill, 2015, is pending in Parliament. It covers transactions through all modes and also recommends adequate penalty for erring manufacturers and traders.

editorials Updated: Dec 06, 2016 22:00 IST
By introducing demonetisation, the government has pushed more and more people to move online; it now must keep its part of the deal by passing the law and securing the interests of the consumers.
By introducing demonetisation, the government has pushed more and more people to move online; it now must keep its part of the deal by passing the law and securing the interests of the consumers.(Representational image)

It’s been four weeks since the Centre decided to demonetise high-value currency notes but the consumers’ cash crunch has had a mixed impact on online businesses. According to a report by Redseers, a consulting firm, e-commerce has suffered heavily post demonetisation since most people still prefer cash on delivery of products.

Despite this setback, the future looks rosy for e-commerce in India. According to global payments firm Worldpay, the Indian e-commerce market is set to overtake the United States and become the second-largest in the world by 2034, going head-to-head with China for top position.

Read: The cost of cash: Going cashless could save Indian economy crores

The report added that the e-commerce market is expected to grow “exponentially” with emerging markets leading the charge -- particularly India -- where the segment is predicted to mature by 28% per year from 2016 to 2020, thanks to massive surges in Internet penetration, a swelling millennial population and the rising uptake of mobile phones.

Read: Hit by cash crunch, buyers opt for online food delivery and e-grocers

While this is good news, there is one area that the government needs to tackle on a war footing: India needs a separate law for e-commerce with a view to protecting the rights of web consumers in India.

According to a study (Consumer Rights in the New Economy: Amending the Consumer Protection Act, 1986) by Akhileshwar Pathak of IIM-Ahmedabad, there has been a rise in the number of complaints by consumers against e-commerce firms because the buyer is not able to inspect or sample the goods or services, and also fraudulent payment services. Moreover, all kinds of substandard goods are being dumped in the country because India is a price-sensitive market.

Read: E-com sales to fall by 25% as India faces cash crunch

Responding to the requirements of an Internet-backed economy, the European Union has come up with the ‘Directive on the Protection of Consumers’.

Some of these consumer grievances have been tackled in the Consumer Protection Bill, 2015, which is pending in Parliament. The Bill covers transactions through all modes, including offline, online, through electronic means, teleshopping, or other multi-level marketing and also recommends adequate penalty for erring manufacturers and traders. By introducing demonetisation, the government has pushed more and more people to move online; it now must keep its part of the deal by passing the law and securing the interests of the consumers.