In a historic move, Nepal’s Parliament passed the Electronic Commerce (e-commerce) Bill on Sunday, marking a significant milestone in the regulation of the country’s rapidly growing online trade sector. This development comes nearly 25 years after the launch of Nepal’s first online store, muncha.com, in 2000. The new law aims to address long-standing challenges in the e-commerce industry, including consumer protection, fraud prevention, and the regulation of online business practices.
The passage of the bill is a culmination of years of advocacy by consumer rights activists, e-commerce entrepreneurs, and policymakers who have long emphasized the need for a legal framework to govern online trade. With the rise of digital platforms and the increasing penetration of the internet, Nepal’s e-commerce sector has grown exponentially, but the absence of a robust legal framework has left consumers vulnerable to unethical practices.
Key Provisions of the E-Commerce Bill
The newly passed bill introduces several critical provisions to regulate online trade and protect consumers. Here are some of the most significant aspects of the legislation:
1. Stricter Penalties for Non-Compliance
Under the amended bill, e-commerce platform operators who fail to meet their legal responsibilities could face a jail term of up to three years, an increase from the previously proposed two years. Additionally, fines ranging from Rs 300,000 to Rs 500,000 may be imposed, depending on the severity of the violation. These stricter penalties aim to deter unethical practices and ensure accountability among online businesses.
2. Definition of E-Commerce Business
The bill defines an e-commerce business as the buying and selling of goods and services through an online platform. However, platforms that only inform or promote goods and services without facilitating transactions are not considered e-commerce businesses. This distinction ensures that the law applies specifically to platforms engaged in commercial transactions.
3. Written and Online Agreements
The bill mandates that intermediary business platforms must have agreements with sellers in two forms: written and online. Previously, only written agreements were required. This dual requirement aims to enhance transparency and reduce disputes between sellers and platform operators.
4. Refund Policy for Consumers
One of the most consumer-friendly provisions of the bill is the refund policy. Buyers can request refunds if the delivered goods or services do not match the listed details, such as design, trademark, shape, picture, weight, or warranty period. Sellers cannot refuse refunds if the goods are defective, delivered late, or differ from the agreed description. This provision is expected to significantly reduce consumer grievances and build trust in online shopping.
5. Payment Flexibility
The amended bill allows buyers to pay either the traders or transporters on behalf of the traders. Payments made to transporters are considered payments to traders, providing greater flexibility and convenience for consumers.
6. Registration of E-Commerce Platforms
All e-commerce platforms must be registered in the electronic system of the Department of Commerce, Supplies, and Consumer Protection. Failure to register can result in fines ranging from Rs 10,000 to Rs 50,000. The department will also conduct regular inspections to ensure compliance with the law.
7. Extended Deadline for Updating Product Details
The bill extends the deadline for traders to update the details of goods and services in case of any changes from 24 to 48 hours. This provision gives traders more time to ensure accurate product listings, reducing the likelihood of errors and disputes.
8. Protection for Micro and Cottage Entrepreneurs
The amended bill allows micro and cottage entrepreneurs to sell their goods and services using other online platforms, rather than requiring them to operate their own e-commerce platforms. This provision is expected to empower small businesses and promote inclusivity in the digital economy.
The Journey to E-Commerce Regulation
The journey to regulate Nepal’s e-commerce sector has been long and arduous. The draft bill was first prepared in 2021, but frequent changes in government delayed its passage. The absence of a legal framework has allowed unscrupulous practices to flourish, with many consumers reporting issues such as damaged products, wrong items, price discrepancies, and a lack of return and refund options.
The passage of the bill is a testament to the persistence of consumer rights activists and e-commerce entrepreneurs who have long pushed for legislation to address these challenges. Bishnu Prasad Timilsina, General Secretary of the Forum for Protection of Consumer Rights-Nepal, hailed the bill as the “most awaited e-commerce law” and emphasized the importance of its effective implementation.
Challenges and Opportunities
While the passage of the e-commerce bill is a significant step forward, challenges remain. One of the most pressing concerns is the enforcement of the law. Historically, Nepal has struggled with the effective implementation of legislation, and ensuring compliance with the new e-commerce regulations will require robust monitoring and enforcement mechanisms.
Additionally, the bill does not address some critical issues, such as unhealthy price competition among online retailers and data privacy concerns. E-commerce entrepreneurs have called for further amendments to address these gaps and ensure a level playing field for all stakeholders.
The Role of Muncha.com in Nepal’s E-Commerce Journey
The passage of the e-commerce bill also highlights the pioneering role of muncha.com, Nepal’s first online store. Established in the 1920s as a department store, Muncha House ventured into online shopping in 2000 to cater to non-resident Nepalis looking to send gifts to their families and friends back home. Over the years, muncha.com has become a symbol of Nepal’s e-commerce evolution, paving the way for other online platforms to emerge.
The Road Ahead
The enactment of the e-commerce law is a significant milestone for Nepal’s digital economy. By providing a legal framework for online trade, the bill aims to protect consumers, promote fair business practices, and foster trust in e-commerce platforms. However, its success will depend on effective implementation and enforcement.
As Nepal’s e-commerce sector continues to grow, stakeholders must work together to address emerging challenges and seize the opportunities presented by the digital economy. With the right policies and practices in place, Nepal’s e-commerce industry has the potential to become a key driver of economic growth and innovation in the years to come.
Conclusion
The passage of Nepal’s e-commerce bill marks a new chapter in the country’s digital transformation. After 25 years of unregulated online trade, the new law provides much-needed clarity and protection for consumers and businesses alike. While challenges remain, the bill represents a significant step forward in creating a fair, transparent, and accountable e-commerce ecosystem. As Nepal embraces the digital age, the successful implementation of this law will be crucial in shaping the future of online trade in the country.
