Trust, Transparency, and Trade-Offs: What the Country-of-Origin Filter Means for India’s E-Commerce Market
The proposed “country-of-origin” filter may shift online shopping from price-driven to trust-driven behaviour
A background note can be accessed here: Department of Consumer Affairs Proposes ‘Country of Origin’ Filter on E-Commerce
Mohit Kalawatia: Manager, Open Network For Digital Commerce (ONDC)
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Institutions: Department of Consumer Affairs | Ministry of Commerce and Industry
How differently are Indian consumers likely to react to products on e-commerce platforms labelled as “Sourced from the US”, “Sourced from China”, or “Sourced from India”? If reactions differ, what underlying factors – trust, perceived quality, price sensitivity, or geopolitics – might explain this variation?
Country-of-origin (COO) disclosure is not new. The Legal Metrology Rules already require all imported pre-packaged goods, including those sold online, to display COO. The Department of Consumer Affairs now proposes a searchable COO filter on e-commerce platforms, shifting COO from a static product-page detail to a more prominent decision cue.
Research shows that origin information acts as an extrinsic cue shaping perceived quality, safety and trust. Products labelled “Sourced from India” may benefit from familiarity and baseline trust, particularly in categories such as food, personal care and apparel, where domestic brands enjoy strong consumer confidence. “Sourced from the US” often signals higher quality or technological sophistication, appealing to consumers who prioritise brand reputation and durability.
By contrast, products associated with lower-cost manufacturing hubs may elicit reduced trust among some consumer segments due to concerns about durability, safety or perceived quality. These effects, however, are not uniform: a large price-sensitive segment continues to prioritise affordability over origin, and for low-involvement products the influence of COO information remains modest because consumers devote little attention to such purchases.
Evidence also shows that consumers frequently overstate the importance of COO in surveys but seldom check labels during actual purchases. On e-commerce platforms, a mandatory COO filter is therefore most likely to influence behaviour in categories where trust, safety or identity considerations are already salient.
Once implemented, will the COO filter affect large online marketplaces differently from smaller or niche platforms? If so, how might this policy reshape market competition vis-a-vis sourcing strategies across players?
A mandatory COO filter is likely to influence large online marketplaces and smaller or niche platforms quite differently. Large platforms, which host vast assortments and rely heavily on third-party sellers, may face greater compliance and verification burdens. Ensuring accurate COO data at scale, across millions of SKUs and thousands of sellers, will require system changes, and audit mechanisms. These costs are easier for large players to absorb, but misclassification risks may expose them to greater regulatory scrutiny.
Smaller or niche platforms, particularly those already positioned around curated, premium or locally sourced products, may experience the opposite effect. For these players, a COO filter could strengthen their value proposition by making domestic or high-quality origins more discoverable. Platforms built around artisanal, organic, or “Made in India” assortments may gain visibility without significant additional operational burden.
From a competition perspective, the policy may subtly shift sourcing incentives. Large platforms may nudge sellers toward clearer, higher-trust origins in sensitive categories to reduce consumer complaints and enforcement risks. Smaller platforms may lean more strongly on COO as a branding strategy. Overall, the filter is likely to move competition beyond price, elevating transparency and trust as key differentiators in how marketplaces signal product origins.
Who should bear primary responsibility for COO labelling – the seller or the e-commerce platform? What are the key trade-offs in each approach?
Under the Legal Metrology Rules, primary responsibility for COO labelling rests with the manufacturer, packer or importer – the entities who control sourcing information and are legally required to ensure that all declarations on the physical package are accurate. Marketplace e-commerce entities only have a display obligation: they must show online whatever declarations already appear on the package, but they are not liable for verifying correctness so long as they act as intermediaries under the IT Act.
Placing primary responsibility on sellers or importers maintains regulatory continuity, aligns liability with actual knowledge of the supply chain, and avoids creating disproportionate burdens on marketplaces hosting millions of listings. A balanced approach – accuracy obligations on sellers/importers, and infrastructure plus takedown obligations for platforms – best matches practical feasibility and the logic of the existing Legal Metrology framework
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