Monthly Archives: April 2014

Amazon Starts Selling Apparel On Its Indian Website

Amazon Starts Selling Apparel On Its Indian WebsiteAmazon has been analysing Indian e-commerce market for long. It made appropriate investments in Indian e-commerce segment and has been waiting for the right opportunity.

Although Indian e-commerce segment is very remunerative and profit oriented yet it is also subject to financial and legal risks. It seems Amazon has been playing safe and has adopted wait and watch policy till the e-commerce industry of India is consolidated. This includes regulatory clarifications as well as till now FDI in multi brand retail sector has not been allowed in India.

According to media reports, Amazon has started selling apparel on its India website. Amazon will sell ethnic women wear from more than 90 brands and also offer sunglasses for men, women and children.

“With a vast selection of fashion jewellery, watches, beauty products, handbags, clutches, shoes and now ethnic wear and sunglasses, Amazon.in offers a compelling fashion and lifestyle shopping destination for women,” Amazon said in a statement.

Amazon launched its marketplace platform in India last June by selling books and video content. Since then it has expanded its product offering to electronics, toys, music and other consumer goods.

Amazon’s entry into apparel and accessories segment will increase competition for other Indian e-commerce players of this field. Apparel and accessories offer higher margins to online retailers compared with books and electronics, where there’s less or no room to set high prices.

Rakuten Inc Planning To Explore Indian E-Commerce Market Starting With A Travel And Hospitality Portal

Rakuten Inc Planning To Explore Indian E-Commerce Market Starting With A Travel And Hospitality PortalE-commerce industry in India is fast growing and many entrepreneurs have started exploring the same. However, lack of insight and planning on their part has also resulted in many such new ventures being shut down after few years. Financing is another problem that is forcing many e-commerce entrepreneurs to shut their shops in India. Besides, regulatory requirements are also there that very few e-commerce entrepreneurs are able to meet.

Nevertheless, the e-commerce segment of India is very remunerative and big players are trying their level best to get the biggest share of the same. Foreign e-commerce players have also shown great interest in Indian e-commerce market. According to media reports, Japanese online retailer Rakuten Incorporation may enter India in the next six to eight months, and is seeking a strategic alliance to tap rapid growth in the country’s Rs. 62,000 crore e-commerce market.

To start with, Rakuten is exploring the possibility of starting a travel and hospitality portal in India. It is also actively exploring getting into back-end solutions such as logistics, through an acquisition.

Rakuten has various businesses such as e-retail, travel and financial services (payment solutions). Its 100% subsidiary Rakuten Travel operates an online hotel reservation website with over 1.8 million room nights booked per month. The firm has access to more than 20,000 domestic and 15,000 international hotels and has a presence in South Korea and China.

FSSAI’s Product Approval Scheme Is Impacting Health And Nutraceutical Industry Of India

FSSAI’s Product Approval Scheme Is Impacting Health And Nutraceutical Industry Of IndiaThe dietary and health supplement, functional food and nutraceutical legal and regulatory compliances in India have taken a totally different meaning in the contemporary information and communication technology era. Use of e-commerce model has not only expanded the horizons and territories of these businesses but it has also imposed techno legal compliance requirements upon them.

As on date the requisite techno legal regulatory framework for dietary and health supplement, functional food and nutraceutical segments is missing. Till now the Indian Parliament has not been able to integrate the techno legal compliance requirements of these fields through dedicated laws. As a result multiple laws are applicable to these businesses especially if they explore the e-commerce method.

Recently the Bombay High Court stayed the scheme of product approval by FSSAI for six months after considering it as ambiguous. However, this stay is causing inconvenience and losses for the dietary supplement, health supplement, functional food and nutraceutical industry of India.

The stay on product approval process would continue until August 2014, but port authorities have been demanding product approvals from importers of dietary supplements and nutraceuticals. The authorities refused to send the landed products for testing without the product approval. As a result, no clearance would be made for the import of goods in India. Further, even applications made for product approvals are pending approval or rejection for years. These conditions have affected the business of these segments.

A large number of food business operators (FBO) are also exporting nutraceuticals and dietary supplements to developed markets like the United States and Europe, where there is no such product approval system. However, there are adversely affected by the uncertain regulatory regime in India. Most of these FBO are not at all aware of the techno legal requirements that they have to comply with while selling their products through websites and e-commerce portals.

The impugned product approval scheme by FSSAI initially limited the requirement of product approval for novel foods that contain ingredients which are introduced for the first time in the country or which do not have a history of safe use. However, the scope of scheme was extended to cover all categories of products which are not standardised, even if they were old and established in the market.

As a result a writ petition was filed in the Bombay High Court against such scheme. Till now FSSAI has not been able to justify its power to issue regulations/scheme by showing that Indian Parliament approved the same.  In the interim stay on January 31, 2014, the Bombay High Court stayed the product approval advisory dated May 11, 2013 for a period of four weeks from February 4, 2014. While the High Court extended the period for conversion of old licences by a period of eight weeks in an advisory issued recently, FSSAI extended the same by six months until August 2014.

Dietary And Health Supplement, Functional Food And Nutraceutical Legal And Regulatory Compliances In India

Dietary And Health Supplement, Functional Food And Nutraceutical Legal And Regulatory Compliances In IndiaThe market for dietary supplement, health supplement, functional food and nutraceutical is fast developing in India. With this development the health, food and medicine related legal compliances in India have also increased a lot. Most of the contemporary healthcare and nutraceutical companies and businesses have started using e-commerce as a method of sales, growth and development. This has given rise to many techno legal compliances on their part.

For instance, fields like online pharmacies, ayurveda, healthcare technology, nutraceuticals, e-health, m-health, telemedicine, etc require compliance with techno legal requirements as prescribed by various legislations of India. These include compliance with laws like Prevention of Food Adulteration Act, 1954 and Rules 1955 (PDF), Food Safety and Standards Act, 2006 (PDF), information technology act, 2000, etc. A complete list of various laws that are required to be taken care of by various healthcare and nutraceutical companies and businesses can be accessed here.

When business is done through e-commerce mode, cyber law, cyber security and data security compliances are also required to be taken care of. Internet intermediary liability and cyber law due diligence (PDF) must be taken care of beforehand before launching a website in these fields. The position has become so clear now that cyber due diligence cannot be ignored by Indian companies anymore.

Food Safety and Standards Authority of India (FSSAI) has been playing an important role in ensuring proper safety and security of food products in India. There are other regulatory authorities as well that come into picture when e-commerce mechanism is used by the stakeholders under this segment.

In their own interest, dietary supplement, health supplement, functional food and nutraceutical stakeholders must comply with techno legal compliance requirements as prescribed by various law of India if they wish to continue the e-commerce model.

Online Sale Of Prescribed Drugs In India Under DGCA Scanner

Online Sale Of Prescribed Drugs In India Under DGCA ScannerOnline pharmacies in India are operating in an unregulated and illegal manner. Similarly, the Ayurvedic and Nutraceuticals e-businesses are also not complying with Indian laws and regulations and are operating illegally. All this is happening even after the websites pertaining to online pharmacies, Ayurvedic products, Nutraceutical products, etc were contemplated to be put under regulatory scanner.

For too long the regulatory action was pending and missing. After much debate the regulatory authorities have decided to take illegal online pharmacies seriously. The Maharashtra FDA has already approached DCGI for regulating illegal online pharmacies within the state. The Hyderabad drug authorities are also keen on regulating illegal sale of drugs through online mechanism. In this regard, the online sales of drugs like anti-depressants, anti-hypertensives and sildenafil citrate (used for erectile dysfunction) without prescriptions have been brought to the notice of the drug authorities.

A drug control officer said the issue was that these activities were being carried out clandestinely by a group of pharmacists and also by companies. While in other parts of the country raids have been carried out, there have only been complaints from time to time about the illegal sale of these drugs in the state. Before it reaches alarming levels, the Drugs Controller General of India has been asked to monitor these activities.

Deputy director of the Drugs Control department, Hyderabad, Nagabhusam P. said, “These are addictives. In all our forums we have been explaining that online sales are illegal. Companies or individuals must not indulge in it.” There are some who are taking prescriptions from doctors on smartphones and then ordering the drugs. The number is less now but it can slowly become a huge burden.

Thus, mobile health related laws and regulations in India have added another dimension to these complicated legal norms. If a medical device is also sold by these online pharmacies that intend to serve a health/medical purpose, the mobile health and telemedicine related legal issues would also arise.

The regulatory and legislative measures to check online pharmacies trading in banned drugs in India are also in pipeline. The digital communication channels for drugs and healthcare products in India are also subject to numerous regulatory compliances. All these issues require implementation of techno legal measures on the part of Indian government.

The online sale of prescribed drugs and medicines in India is a very controversial area. Most of the online pharmacy stores in India and Ayurvedic products websites are unable to comply with the requirements of Indian laws. There are many techno legal requirements pertaining to privacy, data protection (PDF), encryption, cyber law due diligence (PDF), Internet intermediary obligations, cloud computing, etc that are required to be complied with by online pharmacy stores and Ayurvedic products websites operating in India.

Maharashtra FDA Approaches DCGI For Regulating Illegal Online Pharmacies Operating In India

Maharashtra FDA Approaches DCGI For Regulating Illegal Online Pharmacies Operating In IndiaIllegal online pharmacies in India have become life threatening nuisance but Indian government has still not deemed it appropriate to tackle this problem. The truth is that online pharmacies in India are operating in an unregulated manner. This is despite the fact that we have well established laws for opening an online pharmacy store in India. Even the Ayurvedic and Nutraceuticals e-businesses are required to comply with Indian laws to operate legally.

Health, food and medicine related legal compliances in India have become really stringent. A good compilation of food, health, cosmetics, drugs, medicines and nutraceutical laws, rules and regulations in India has been provided by Perry4Law for the larger benefit of all healthcare stakeholders.

As on date, the online pharmacies, including Ayurvedic e-commerce websites, in India are not at all complying with the legal requirements pertaining to their operation in India. Rather they are actively violating the laws of India in this regard. Illegal and unregulated online sale of prescribed medicines in India is still happening despite the threat of the Directorate of Drugs Control of India to punish such illegal pharmacies. Similarly, Ayurvedic preparations and products are openly sold in active violation of Indian laws and regulations.

The online sale of prescribed drugs and medicines in India is a very controversial area. Most of the online pharmacy stores in India and Ayurvedic products websites are unable to comply with the requirements of Indian laws. There are many techno legal requirements pertaining to privacy, data protection (PDF), encryption, cyber law due diligence (PDF), Internet intermediary obligations, cloud computing, etc that are required to be complied with by online pharmacy stores and Ayurvedic products websites operating in India.

Mobile health related laws and regulations in India have added another dimension to these complicated legal norms. If a medical device is also sold by these online pharmacies that intend to serve a health/medical purpose, the mobile health and telemedicine related legal issues would also arise.

The regulatory and legislative measures to check online pharmacies trading in banned drugs in India are also in pipeline. The digital communication channels for drugs and healthcare products in India are also subject to numerous regulatory compliances. All these issues require implementation of techno legal measures on the part of Indian government.

In one such step, the Maharashtra Food and Drug Administration (FDA) has approached the Drugs Controller General of India (DCGI) to device an action plan for curbing the illegal online sale of medicine.  Stating it as a nationwide phenomenon, an FDA official maintains that they are in constant touch with DCGI to plug the loophole in terms of enforcement of the drugs act before it culminates into an alarming situation.  FDA officials say this is a huge racket as foreign buyers can obtain prescription drugs including addictive anti-depressants, anti-hypertensives and those containing sildenafil citrate (a key component in drugs for erectile dysfunction also used to treat pulmonary arterial hypertension) easily and beat stringent rules in their local markets. A senior FDA official has informed that FDA has till date seized drugs worth over Rs. 2 crore from various parts of the city over the last one month and are still on the lookout for more companies involved the illegal sale of prescription drugs.

Online purchase of medicines is a clandestine activity and as Maharashtra FDA Commissioner pinpoints, “It is an unorganised trade and forms a miniscule part of the total Rs. 80,000 crore export business potential accounted from India. We are still investigating the matter and more such companies might face action for illegal sale of drugs without a license and prescription in contravention to Section 18 C and 18 (a) (6) and may attract penalties under Section 27 (b) and (d) ranging from 3 years imprisonment or fine upto Rs. 10, 000 or 5 years imprisonment or fine above Rs. one lakh.

It is only natural that more such legal actions would be taken against illegal online pharmacies websites in the near future. It would be a prudent exercise to comply with the techno legal requirements in this regard by the online pharmacies and Ayurvedic products websites as soon as possible.