E-Commerce Guidelines Need Nuance, not a One-Size-Fits-All Regulation

In this context, the Bureau of Indian Standards (BIS) released a draft ‘standard’ titled “E-Commerce Principles and Guidelines for Self-Governance”, earlier this year. While the intent of this may appear commendable: to establish a structured framework that balances consumer interest, platform accountability, and fair business practices, it ends up ignoring the already existing statutory framework and overlaps with the same. Additionally, the BIS draft adopts a “one-size-fits-all” approach that could create barriers for startups, D2C brands, emerging digital sellers as well as established marketplaces and platforms – the very segment representing the next wave of innovation and employment in India’s digital economy. This, in effect, disincentivizes sellers from adopting digital trade.

The BIS draft rightly emphasizes seller transparency, product authenticity, fair return policies, and effective customer grievance redressal – the foundational pillars for consumer trust. However, applying the same set of regulatory standards across all platforms, irrespective of size, structure, or business model would be counterproductive as it would be a hindrance to the smaller sellers. One should also note that largely BIS standards in India are voluntary unless given mandatory effect by the Government which notifies Quality Control Orders (‘QCO’) for this purpose. It, therefore, becomes all the more imperative that a one size fits all approach will cause more bottlenecks to different stakeholders in this ecosystem.

India’s digital commerce landscape is notably diverse. There are now over 800 active direct-to-consumer (D2C) brands, contributing to a segment valued at over $80 billion, with nearly 250 million consumers shopping online in 2024 alone.1 Many of these businesses operate on lean models, with limited infrastructure and resources. Yet, the draft presumes a structured, marketplace-style model for all entities, overlooking operational realities of platforms operating on a D2C basis, facilitating casual consumer-to-consumer (C2C) exchanges and digital-only goods and services. A more nuanced framework that recognises such diversity is essential.

Provisions on algorithmic transparency, mandatory comparison tools, customer care toll-free numbers, and publishing of open APIs are all geared toward promoting fairness and competition. While these objectives are laudable, their blanket enforcement may challenge smaller platforms that do not yet have the technical or financial capacity to meet such requirements. Requiring a new or niche platform to display customer ratings or offer product comparison tools, for example, may be operationally unviable at an early stage.

As of 2025, India hosts more than 990 funded e-commerce startups and 25 unicorns. These firms are key to job creation, local entrepreneurship, and economic decentralisation. While strong compliance frameworks are essential, a regulatory model that fails to recognize the unique constraints could slow their momentum. Many established platforms have already adopted mature, customer- and seller-centric processes and should be encouraged to build upon and enhance these standards over time. At the same time, fostering a culture of knowledge-sharing and self-regulation can help promote industry-best practices, while allowing space for innovation, experimentation, and course correction without the chilling effect of punitive overreach.

Safe Harbour and Platform Liability: A robust mechanism to create a level playing field and predictability

The draft also revisits platform obligations such as seller verification, investigating counterfeit complaints, and grievance redressal. However, such provisions must be carefully calibrated to avoid undermining safe harbour protections under Section 79 of the Information Technology Act, 2000. E-commerce intermediaries should not be held liable for third-party actions unless there is clear evidence of facilitation or knowledge of unlawful conduct. Preserving safe harbour is fundamental to maintaining legal predictability and investor confidence in the digital economy. Any policy shift that creates ambiguity around intermediary liability could have a chilling effect on innovation and platform scalability.

India already has a well-established regulatory framework governing digital commerce, including the Consumer Protection Act, 2019 and the Consumer Protection (E-commerce) Rules, 2020, and the Information Technology Act, 2000. When the specialist extant laws already cover a large part of the requirements under the draft standards, the enforcement of such provisions should be the focus instead of creating more duplicate requirements. Creating parallel mandates risks confusion and conflicting obligations for businesses. A more pragmatic approach would be to align BIS standards with the current legal framework ensuring they act as complementary guidelines. This would minimize regulatory friction, prevent fragmentation, and offer much-needed clarity for players operating in an already complex compliance environment.

The BIS initiative, definitely, represents a timely and necessary effort to build long-term trust in digital commerce. However, for it to serve the sector meaningfully, the final guidelines must be flexible, non-prescriptive, and voluntary in nature, providing a broad mental model rather than a rigid rulebook.

The current draft oversteps several areas. In a sector that is already among the most regulated in the country, it attempts to regulate how e-commerce platforms interact with their own group or affiliate companies, particularly around inventory and service fulfilment – areas that clearly fall under the jurisdiction of government policy and sectoral regulators. Even more concerning is the asymmetry it creates by applying restrictions solely to digital commerce, while leaving offline retail untouched. This results in an uneven playing field and unfairly penalizes digital-first businesses for their growth and formalization.

Globally, there are few, if any, precedents of jurisdictions issuing binding standards that impose additional restrictions uniquely on e-commerce entities. India must avoid being an outlier in this. Whether there is a need for BIS to become a disrupter and act as a gatekeeper must be taken into account while addressing the needs of the sellers and achieving the Government’s vision.