Consumer Protection Act 2019: What Foreign Brands Selling in India Must Know

Why Foreign Brands Must Pay Attention to the Consumer Protection Act 2019

India replaced its three-decade-old Consumer Protection Act of 1986 with the Consumer Protection Act, 2019 (CPA 2019), which came into force on July 20, 2020. For foreign brands selling in India — whether through a wholly-owned subsidiary, a joint venture, a franchise arrangement, or an e-commerce marketplace — the 2019 Act represents a fundamental shift in consumer rights enforcement. The law introduced product liability as a statutory concept for the first time, created the Central Consumer Protection Authority (CCPA) with suo motu investigation powers, expanded the definition of consumer to cover online transactions, and established a mediation-based dispute resolution mechanism.

For a foreign brand that manufactures products outside India and sells them through distributors, e-commerce platforms, or its own retail channels in India, the CPA 2019 creates direct liability exposure that did not exist under the earlier law. This guide covers every provision that matters for foreign brands operating in or selling to the Indian market.

Scope of the Act: Who Is a Consumer and What Transactions Are Covered

The CPA 2019 defines a consumer under Section 2(7) as any person who buys goods or hires/avails services for a consideration. This definition explicitly includes online and electronic transactions, which brings cross-border e-commerce sales squarely within the Act's scope. A consumer in India purchasing goods from a foreign brand through an e-commerce marketplace like Amazon India, Flipkart, or the brand's own website is protected under the CPA 2019.

Critically, the Act covers goods and services purchased for personal use — not for resale or commercial purposes. However, the definition of "goods" is broad and includes all movable property, food products, and articles attached to or forming part of immovable property. Services include banking, insurance, transport, telecommunications, housing construction, entertainment, and amusement.

Territorial Jurisdiction

Consumer complaints can be filed where the complainant resides, where the cause of action arises, or where the opposite party carries on business. For foreign brands selling through Indian distributors or e-commerce platforms, this means complaints can be filed anywhere in India where the product was sold or the consumer resides — not just where the brand has its registered office.

Product Liability: The Game-Changer for Foreign Manufacturers

Chapter VI of the CPA 2019 (Sections 82-87) introduces product liability as a standalone cause of action. This is the single most consequential change for foreign brands. Under the earlier 1986 Act, consumer complaints were limited to deficiency in service or defects in goods — the concept of manufacturer liability for harm caused by a defective product was not codified.

What Is Product Liability Under the CPA 2019?

Section 82 defines product liability as the responsibility of a product manufacturer, product seller, or product service provider to compensate for any harm caused to a consumer by a defective product manufactured or sold, or by a deficiency in services relating to the product. "Harm" includes damage to property, personal injury, illness, or death, as well as mental agony or emotional distress.

Liability of the Product Manufacturer

Under Section 84, a product manufacturer is liable if the product contains a manufacturing defect, is defective in design, deviates from manufacturing specifications, does not conform to an express warranty, or if the manufacturer fails to provide adequate instructions or warnings regarding the product's correct use.

For foreign brands, this is critical: the manufacturer does not need to be present in India to be liable. If the product is sold in India — directly or through any intermediary — the manufacturer is exposed to liability under Indian consumer law. The NCDRC (National Consumer Disputes Redressal Commission) has jurisdiction over foreign manufacturers where the cause of action arises in India.

Liability of the Product Seller

Section 85 provides that a product seller (as distinct from the manufacturer) is liable when the manufacturer cannot be identified, or where the manufacturer is not subject to Indian law, or where an order passed against the manufacturer cannot be enforced against them. This provision is explicitly designed for situations involving foreign manufacturers.

This means that Indian distributors, importers, and e-commerce platforms that sell foreign brand products can be held liable as product sellers when the foreign manufacturer cannot be reached. For foreign brands, this creates downstream liability for their Indian channel partners, which in turn affects the commercial relationship and risk allocation in distribution agreements.

Central Consumer Protection Authority (CCPA)

The CPA 2019 established the CCPA under Section 10, with powers that no previous consumer protection body possessed. The CCPA has an Investigation Wing headed by a Director-General and can take suo motu action — meaning it can investigate consumer rights violations without waiting for a consumer complaint.

CCPA Powers Relevant to Foreign Brands

• Recall or withdraw products that are dangerous, hazardous, or unsafe
• Order reimbursement of the price paid for recalled goods
• Discontinue unfair trade practices including misleading advertising
• Issue directions to manufacturers, sellers, endorsers, and publishers regarding misleading advertisements
• Impose penalties for misleading advertisements: up to INR 10 lakh and imprisonment up to 2 years for the first offence; up to INR 50 lakh and imprisonment up to 5 years for subsequent offences
• Prohibit endorsers from endorsing products for up to 1 year (first offence) or 3 years (subsequent)

The CCPA has been actively exercising these powers. As of 2025, the CCPA has issued over 325 notices for violation of consumer rights, misleading advertisements, and unfair trade practices, imposing penalties amounting to over INR 1.19 crore. Foreign brands operating in India should expect increasing scrutiny, particularly in sectors like FMCG, consumer electronics, and e-commerce.

E-Commerce Rules: Additional Obligations for Foreign Brands Selling Online

The Consumer Protection (E-Commerce) Rules, 2020 — framed under the CPA 2019 — impose specific obligations on e-commerce entities and sellers on e-commerce platforms. For foreign brands selling through Indian marketplaces or their own D2C websites, these rules create additional compliance requirements beyond the base Act.

Marketplace vs. Inventory Model

India's FDI policy permits 100% foreign investment under the automatic route only in the marketplace model — where the platform acts as a facilitator connecting buyers and sellers. FDI is prohibited in the inventory-based model where the platform owns and sells goods directly. This distinction is critical for foreign brands considering D2C operations in India.

Key E-Commerce Compliance Requirements

• Country of origin disclosure: Every product listed on an e-commerce platform must display the country of origin. Foreign brands must ensure this is accurately reflected across all listings.
• Seller details: The name, address, and contact details of the seller (or importer, as applicable) must be prominently displayed.
• Return and refund policy: Clear return, refund, exchange, warranty, delivery, and shipment policies must be published. These must comply with Indian consumer expectations and the CPA 2019 requirements — not just the brand's global policies.
• Grievance Redressal Officer: Every e-commerce entity must appoint a Grievance Redressal Officer based in India, who must acknowledge complaints within 48 hours and resolve them within 30 days.
• No price manipulation: E-commerce platforms and sellers cannot influence the sale price of goods. Cross-subsidization and deep discounting by foreign-funded platforms have drawn regulatory attention.

The 25% Rule

No single vendor or its group companies can account for more than 25% of total sales on any e-commerce marketplace in a given financial year. This restriction directly affects foreign brands that sell primarily through their own flagship stores on marketplaces. If a single foreign brand's sales exceed 25% of any platform's total sales, the platform is in violation of FEMA and FDI regulations.

Consumer Dispute Resolution: The Three-Tier System

The CPA 2019 establishes a three-tier Consumer Disputes Redressal Commission system:

For foreign brands, the low filing fees and simplified procedures mean that consumers can file complaints without significant financial barriers. Unlike regular civil courts, consumer commissions can dispose of cases within 3-5 months (though complex cases take longer). The process is designed to be consumer-friendly, and foreign brands cannot rely on procedural complexity to discourage complaints.

Mediation Under the CPA 2019

The Act introduced a formal mediation mechanism as an alternative to adjudication. Consumer commissions can refer matters to mediation at any stage, with the written consent of both parties. Mediated settlements are binding and enforceable as orders of the commission. For foreign brands, mediation offers a faster and more discreet resolution mechanism compared to contested hearings.

Misleading Advertisements and Unfair Trade Practices

Sections 2(28) and 2(47) of the CPA 2019 define misleading advertisements and unfair trade practices broadly. For foreign brands adapting their global marketing campaigns for the Indian market, several provisions require careful attention:

• Misleading advertisement: Any advertisement that gives a false description, makes a false guarantee, or deliberately conceals important information is considered misleading. This includes product claims about composition, efficacy, quantity, or quality.
• Surrogate advertising: The CCPA has taken an aggressive stance on surrogate advertising — where brands advertise products different from the ones they actually sell (common in alcohol and tobacco sectors). Foreign brands in restricted categories must be especially cautious.
• Comparative advertising: While permitted, comparative advertising must be factual and not disparaging. Making false or unsubstantiated claims about competitors' products can trigger both CPA 2019 and Trademarks Act proceedings.

The penalty structure is significant: INR 10 lakh and up to 2 years imprisonment for first offence, escalating to INR 50 lakh and 5 years for subsequent offences. Endorsers — including celebrity endorsers — can also be penalized and barred from endorsing the product.

How the CPA 2019 Interacts with Other Laws

Foreign brands selling in India must understand that the CPA 2019 does not operate in isolation. Consumer complaints can invoke multiple regulatory frameworks simultaneously:

• BIS (Bureau of Indian Standards) Act: Products notified under the BIS Act must carry the ISI mark. Selling non-certified products in notified categories is a criminal offence.
• Food Safety and Standards Act (FSSAI): Foreign food and beverage brands must comply with FSSAI licensing, labelling (including vegetarian/non-vegetarian marking), and ingredient disclosure requirements.
• Legal Metrology Act: All pre-packaged goods sold in India must display MRP (Maximum Retail Price), net quantity, manufacturing date, and other prescribed information in the format required by Indian law — not just the format used in the brand's home country.
• Drugs and Cosmetics Act: Foreign cosmetics and pharmaceutical brands require specific import licenses and must comply with Indian formulation and labelling standards.

Non-compliance with any of these sectoral laws can also be raised as an unfair trade practice under the CPA 2019, creating dual liability exposure.

Sector-Specific Considerations for Foreign Brands

FMCG and Food Products

Foreign food brands entering India must comply with FSSAI licensing requirements — which mandate a central license for companies with turnover exceeding INR 12 lakh — and India-specific labelling rules. These include mandatory vegetarian/non-vegetarian marking (green dot/brown dot), declaration of all ingredients in English and Hindi, display of FSSAI license number, and best-before/use-by dates in the DD/MM/YYYY format. Failure to comply with FSSAI requirements can be raised as an unfair trade practice under the CPA 2019, creating dual liability. In 2025, the FSSAI increased scrutiny on imported food products claiming "organic" or "natural" status without valid certification from recognized Indian agencies.

Consumer Electronics and Technology

Foreign electronics brands must ensure BIS certification for products in compulsory registration categories — which include IT equipment, LED luminaires, fixed capacitors, and plugs and socket outlets. Products sold without BIS certification in notified categories face seizure and criminal penalties under the BIS Act. Additionally, the CPA 2019's product liability provisions apply to software defects in consumer electronics — a grey area globally that India's consumer commissions have been willing to adjudicate. Warranty obligations must comply with Indian law: any express warranty made at the time of sale is enforceable regardless of what the brand's global warranty policy states.

Fashion and Luxury Goods

Foreign fashion brands face specific challenges under the Legal Metrology Act regarding MRP declarations. Every product sold in India must display an MRP (Maximum Retail Price) on the packaging — a concept unique to India that foreign brands often struggle with. The MRP must include all taxes, and charging above MRP is a criminal offence under the Legal Metrology (Packaged Commodities) Rules. For luxury brands used to dynamic global pricing, this requires India-specific packaging and pricing strategies. The CPA 2019 also prohibits misleading claims about product origin, composition, or certification — counterfeit origin claims (e.g., marketing products as Italian-made when manufactured elsewhere) can trigger both CPA 2019 and trademark enforcement proceedings.

Pharmaceutical and Cosmetics

Foreign pharmaceutical and cosmetics brands require import licenses under the Drugs and Cosmetics Act, 1940. The CDSCO (Central Drugs Standard Control Organisation) requires registration of all imported drugs and cosmetics, with specific labelling requirements including composition, manufacture and expiry dates, batch number, and import license number. Product liability claims for pharmaceutical products can involve claims of manufacturing defects, inadequate warnings, and failure to disclose side effects. The CPA 2019 applies alongside the Drugs and Cosmetics Act, meaning consumers can pursue claims through consumer commissions — which are faster and more accessible than civil courts — rather than being limited to the drug regulatory framework.

Practical Compliance Steps for Foreign Brands

Step 1: Audit Your Distribution and Sales Channels

Map every channel through which your products reach Indian consumers — distributors, importers, franchisees, e-commerce platforms, and D2C websites. Each channel creates a distinct liability pathway under the CPA 2019. Ensure distribution agreements clearly allocate product liability obligations between the brand, importer, and seller.

Step 2: Review Product Labelling for India Compliance

Indian labelling requirements differ from those in the US, EU, and most other jurisdictions. Verify compliance with the Legal Metrology Act (MRP, quantity, manufacturer details), FSSAI requirements (for food products), and BIS standards (for notified product categories). Country of origin must be displayed on products and e-commerce listings.

Step 3: Establish an Indian Grievance Redressal Mechanism

Appoint a Grievance Redressal Officer based in India. Set up processes to acknowledge complaints within 48 hours and resolve them within 30 days. This is a mandatory requirement under the E-Commerce Rules and a practical necessity under the broader CPA 2019 framework.

Step 4: Obtain Product Liability Insurance

Product liability insurance is not mandatory in India but is strongly recommended for foreign brands. The CPA 2019's expanded liability provisions — including compensation for mental agony and emotional distress — mean that claim amounts can be substantial. A product liability policy covering Indian operations should be part of the brand's risk management framework.

Step 5: Register with Relevant Authorities

Depending on the product category, foreign brands may need GST registration, BIS certification, FSSAI license, Import Export Code (IEC), or a trademark registration in India. Each registration creates a compliance obligation and also establishes the brand's legal presence, which simplifies both enforcement and defence in consumer disputes.

Recent CCPA Enforcement Actions

The CCPA has become increasingly active since 2022. Notable enforcement actions include:

• Orders against major e-commerce platforms for selling products without displaying the country of origin
• Penalties on FMCG companies for misleading claims about product composition and efficacy
• Directions to withdraw advertisements that made unsubstantiated health claims
• Investigations into complaint patterns suggesting systematic product quality issues

Foreign brands should monitor CCPA orders and guidelines published on the Department of Consumer Affairs website. Proactive compliance — rather than reactive response to enforcement actions — is significantly more cost-effective and protects brand reputation in the Indian market.

In 2025, the CCPA specifically increased its focus on e-commerce platforms and foreign brands selling through online channels. The authority has directed platforms to implement more rigorous seller verification processes and ensure that all product listings display accurate country of origin information. Foreign brands that rely on third-party sellers to distribute their products on Indian marketplaces should audit these listings regularly — inaccurate or incomplete product information uploaded by unauthorized sellers can still attract CCPA scrutiny directed at the brand.

Key Takeaways

• The CPA 2019 makes foreign manufacturers directly liable for product defects — and when the foreign manufacturer cannot be reached, the Indian seller, distributor, or importer becomes liable under Section 85.
• The CCPA has suo motu investigation powers and has imposed over INR 1.19 crore in penalties across 325+ notices since its establishment, with enforcement intensity increasing year over year.
• E-Commerce Rules require country of origin disclosure, grievance redressal officers based in India, complaint resolution within 30 days, and compliance with the 25% sales cap per vendor on marketplace platforms.
• Product liability insurance, though not mandatory, is a critical risk management tool for foreign brands given the expanded definition of "harm" that includes emotional distress and mental agony.
• Engage an Indian FDI advisory and legal compliance team to audit your distribution channels, product labelling, and consumer-facing policies against CPA 2019 requirements before entering or scaling in the Indian market.