India Strengthens Consumer Protection with New Law

On 6 August 2019, the Indian Government passed the Consumer Protection Act, 2019 which will replace the Act from 1986. The Act strengthens consumer rights through new provisions on product liability, unfair contracts, and e-commerce. Moreover, it establishes a new regulator, the Central Consumer Protection Authority (CCPA), to promote, protect, and enforce the rights of consumers, for example through class action.

The new Act makes it easier for consumers to file a complaint with Consumer Disputes Redressal Commissions at district, state, and national levels. The 1986 law required consumers to file a complaint at the place where the product was bought or where the sellers of the product have their registered office. The new Act allows consumers to file their complaint with the court from anywhere. An electronic route for filing complaints online shall be made possible as well.

The law introduces a product liability clause which allows consumers to make a claim against a manufacturer, seller, or service provider in case of defective products or deficient services. A compensation is to be made for any harm caused to a consumer by such defective product manufactured or sold. As manufacturers’ liability for products is tightened, this may lead to a wider use of safety standards and conformity assessment to ensure that consumers are not harmed. Within the framework of the Indo-German Working Group on Quality Infrastructure, the German side shared information and good practices of the German and European systems of product liability with the Indian partners.

Against the background of growing e-commerce in India, the new Act treats the buying or selling over digital or electronic networks as equal with direct selling. In combination with the product liability provisions, this increases the responsibility of e-commerce platforms which could be penalised for selling faulty products.

The responsible Indian Ministry of Consumer Affairs, Food and Public Distribution (MoCAF&PD) has started stakeholder consultations to prepare rules and regulations to detail out specifics of the Act. The rules and regulations are planned to be fast-tracked and passed until the end of 2019.

India and Germany cooperate within the Indo-German Working Group on Quality Infrastructure, between the German Federal Ministry for Economic Affairs and Energy and the Indian Ministry for Consumer Affairs, Food & Public Distribution. The Working Group has the goal to reduce technical barriers to trade and strengthen product safety through political and technical dialogue of relevant ministries and regulators.