What is the E-Commerce Act, 2025?
The E-Commerce Act, 2025, is Nepal’s first comprehensive law governing online transactions. It addresses the previously unregulated e-commerce sector, tackling issues like fraud, data privacy, and unfair trade practices. With penalties up to NPR 500,000 or three years imprisonment, the Act underscores Nepal’s commitment to a secure and trustworthy digital economy.
Objectives of the Act
- Regulate digital trade of goods and services
- Enhance consumer protection through robust grievance mechanisms
- Promote transparency and trust in online transactions
- Support small and cottage industries transitioning to digital platforms
- Define clear responsibilities for e-commerce stakeholders
Who Does the Act Apply To?
The Act applies to any person or entity, within or outside Nepal, offering goods or services in Nepal through e-commerce platforms such as:
- Websites
- Mobile apps
- Social media marketplaces
E-commerce is defined as buying or selling via electronic platforms, excluding mere promotion or information sharing (e.g., ads). However, ambiguities remain about whether simple electronic communications (e.g., emails, messages) or brick-and-mortar businesses with online operations fall under its scope.
Exemption: Micro- and cottage entrepreneurs, as defined by the Industrial Enterprises Act, 2020 (e.g., businesses with fixed capital up to NPR 2 million, fewer than nine workers), are exempt from creating dedicated platforms but may still face other compliance requirements.
Key Definitions Under the Act
| Term | Definition |
|---|---|
| Consumer | An individual using or consuming goods/services |
| Buyer | A person purchasing goods/services, including their representative |
| Seller | An entity supplying goods/services to intermediaries or list-based businesses |
| Intermediary Business | A platform facilitating sales between buyers and sellers |
| List-based E-commerce | Businesses selling their own goods/services via electronic platforms |
| Goods | Safe, consumable products, including raw materials and chemicals |
| Services | Utilities, telecom, IT, health, education, banking, insurance, and more |
Compliance Obligations for E-Commerce Businesses
1. Platform Establishment
All e-commerce businesses, except micro/cottage entrepreneurs, must create a dedicated electronic platform displaying:
- Business name, address, contact details
- Registration and PAN/VAT numbers
- Grievance mechanism
Updates: Changes must be updated within 48 hours
Penalty: NPR 20,000–100,000
2. Platform Registration
- Register with the Department of Commerce, Supplies and Consumer Protection (DoCSCP) within three months (by July 16, 2025, for existing businesses)
- Submit business registration, PAN/VAT, contact details, and platform type
Penalty: NPR 20,000–100,000
3. Electronic Contracts
Electronic contracts, including click-wrap agreements, are legally valid if they include:
- Delivery timelines
- Return, refund, and cancellation policies
- Warranty/guarantee terms
4. Mandatory Information Display
Platforms must disclose:
- Product details (name, weight, image, origin)
- Total price (including delivery)
- Warranty and return/cancellation policies
- Manufacturing and expiry dates
- Manufacturer and support contacts
Penalty: NPR 20,000–100,000
5. Return and Refund Policies
Buyers can return goods/services that:
- Do not match descriptions
- Are delayed without reason
- Are defective or poor in quality
Refunds: Full, including taxes (unless an exchange is agreed)
Exclusions: Perishable goods, custom items, sealed goods (e.g., cosmetics)
Penalty: NPR 50,000–300,000
6. Data Privacy
Businesses must:
- Protect personally identifiable information (PII)
- Allow users to update or disable data
- Use data only for legal transaction purposes
Violations may also trigger penalties under broader data protection laws.
7. Grievance Redressal
Platforms must provide:
- Electronic, written, and in-person complaint channels
- Immediate acknowledgement of complaints
- Resolution within 15 days
8. IT Standards
Platforms must comply with government-mandated IT and cybersecurity standards.
Duties and Responsibilities
| Party | Key Duties | Penalty |
|---|---|---|
| Intermediary Business | Display accurate info, maintain records, avoid fake reviews, and implement return policies | NPR 20,000–100,000 |
| List-based E-commerce | Ensure prompt delivery, transparency, and honest advertising | NPR 20,000–100,000 |
| Seller | Provide truthful information, fulfill orders, and support returns | NPR 50,000–500,000 or up to 3 years imprisonment |
| Buyer | Fulfill contracts, inspect goods, and avoid filing false complaints | Not specified |
| Delivery Person | Comply with CPA rules; businesses remain liable for delivery | CPA Penalties |
Severe Violations: Fake reviews or unfair practices are state-party offenses punishable by up to NPR 500,000 or three years imprisonment.
Regulatory Risks and Challenges
- Ambiguity in Scope: Applicability to social media sellers or email-based commerce remains unclear
- Redundant Rules: Labeling overlaps with the Consumer Protection Act
- Return Policy Gaps: Undefined exclusions could lead to disputes
- Enforcement: Limited DoCSCP capacity may hinder oversight
- Small Business Impact: Social media sellers face vague obligations
Opportunities for Businesses
- Boost Consumer Trust: Transparent return and complaint systems
- Cross-Border Trade: Recognition of digital contracts simplifies international commerce
- SME Support: Exemptions for small entrepreneurs ease entry
- Market Expansion: Regulation encourages investment in Nepal’s digital economy
How to Comply with the E-Commerce Act, 2025
- Register your platform with DoCSCP by July 16, 2025
- Display accurate business and product information
- Implement grievance redressal systems (online and offline)
- Ensure compliance with privacy and data protection standards
- Review and align return and refund policies with the law
Conclusion
The E-Commerce Act, 2025, is a game-changer for Nepal’s digital economy, balancing consumer rights, business responsibilities, and innovation. By proactively complying with the law, businesses can build trust, avoid penalties, and thrive in the country’s growing e-commerce ecosystem.