The Department for Promotion of Industry and Internal Trade (DPIIT) has directed e-commerce companies such as Amazon, Flipkart and Patym to find out a suitable way that will help consumers to identify the country of origin for all the products sold on their platforms. This directive soon was released after the clash between Indian and Chinese soldiers on LAC in order to boycott Chinese products.
Though it is an attempt of the government to push for “atma nirbhar bharat” or “self reliance” but it cannot be exactly determined whether this idea of specifying the country of origin in today’s integrated world will serve to any economic purpose or not. The difficulty in executing this idea underlines it absurdity because products are usually assembled in one country and the raw materials or other components are often sourced from several other countries. Hence, this makes it challenging to identify who manufacturers the product.
A distinction has to be made between “assembling” and “manufacturing” and the extent of value added at each stage has to be estimated. Let us understand this with the example of an iPhone. It’s components such as touch screen display, memory chips and microprocessors come from a mix of US, Japanese, Korean and Taiwanese companies, not all of them manufactured in China. These individual components are shipped to China, where it is assembled and then shipped across the world.
So will an iPhone sold on an e-commerce website in India identify China as the country of origin? Even the products that are assembled in India have components from several counties. So the question is, how will the idea of country of origin work? Will it be based on value added? Let us keep an eye on government’s next move to solve these problems based on the place of origin.