Noting that the extent of regulations should be limited, experts believe that experts say excessive regulation adds complexity for micro-sellers on ecommerce platforms.
As the Indian ecommerce market has grown rapidly in the last few years and is also expected to reach USD 325 billion in 2030, the debates around regulating the sector have also come up at regular intervals. Even due to the largely unorganised nature of the sector, experts believe that there should be a fine line between regulation and overregulation.
While arguing that ecommerce, at its core, is simply another channel for selling goods and services, experts highlighted that the aim should be to bring the regulatory treatment of online and offline retail into parity. Noting that a large portion of sellers on the ecommerce platform are the micro, small and medium enterprises (MSMEs), experts stated that every new compliance requirement is an increase in cost and complexity of doing business for these micro-sellers.
Recently, the Bureau of Indian Standards (BIS) came up with the Ecommerce – Principles and Guidelines for Self-governance (guidelines). The guidelines aim to regulate ecommerce transactions by setting principles applicable at various stages of an online purchase, including the pre-transaction, contract formation, and post-transaction phase. This has led to concerns among experts who feel that the extent of regulations should be defined, as they believe that this is not a sector which needs regulation as such.
“Ecommerce operators, platforms, and companies which manage such platforms have evolved over the decade. From what we have seen in the early 2000s, when a lot of foreign companies had entered India in the ecommerce space, and where we are today, there has been a lot of growth, also in terms of regulating themselves. The large operators are conscious of what they are doing. At the end of the day, they do have customers in their mind,” highlighted Shashi Mathews, Partner, IndusLaw.
Lack Of Policy Clarity?
Highlighting that policy makers tend to neglect the fact that any kind of burden that is placed on platforms per se will eventually affect those who are participating on the platform (MSMEs, sellers), experts noted that sometimes the regulations that are aimed at protecting the small businesses tend to pit one kind of MSME against the other.
“In the interest of making sure that the small businesses, offline businesses survive, and therefore you are trying to protect them and putting in more regulations. We forget that you are actually pitting one kind of MSME against the other. The fact that sellers are also MSMEs somewhere are lost in all the conversation because you are so focused on the platform and not on who is using the platform,” explained Nirupama Soundararajan, Co-founder, Policy Consensus Centre.
Is the Ecommerce Ecosystem Overregulated?
Experts pointed out that taking ecommerce as a sector can be difficult at times because everything is now turning electronic. Arguing that when you speaks on regulations, it depends on who you are talking to, the experts noted that the government would look at consumer protection perspective, while the sellers might look at any regulation from a compliance point of view.
“We look at things from specifics and when we divide large problems into smaller problems, we divide the larger system into smaller subsystems to be able to understand what the problem is and then we sit back and discuss with the government,” Swapnil Yadav, Senior Manager, Public Policy & Government Relations, Nasscom, highlighted while speaking in a webinar on Do India’s E-commerce Policies Balance Innovation and Regulation?
When it comes to BIS guidelines, the experts agreed that there are sections which might be problematic to a certain extent. These include issues related to KYCs or lack of mention for sellers or retail service providers, because the standard essentially only talks about the responsibilities of ecommerce platforms, experts noted.
“When we talk about overregulation, we mean in terms of largely duplication. When multiple agencies are asking for the same thing again and again and again. If you look at KYC within financial sector, this is a very often discussed point that every time you go, you have to do your KYC again,” Soundararajan added.
Regulation And Implementation
Experts highlighted that when it comes to such issues, there are equal amount of challenges related to guidelines and tools to implement decisions. Citing example of dark patterns, experts shed light lack of clarity to deal with it. In June 2025, all ecommerce platforms were advised to conduct self-audits to identify dark patterns, within three months of the issue of the advisory, and take necessary steps to ensure that their platforms are free from such dark patterns.
“There is not enough guidance for ecommerce platforms. Maybe large companies have the capability to identify and remove or do the self-audit, but for smaller ecommerce firms there are no dark pattern tools or toolkit which is available, developed or recognised by the government that this is to be followed for every platform. This creates a grey area in terms of compliance and non-compliance with the dark pattern guidelines,” highlighted Dharmendra Jhamb, Partner and Leader Fintech Industry, Grant Thornton.
On a broader note, the future of India’s online retail ecosystem will depend on collaborative policymaking, where regulators, platforms, and sellers work in sync to build a framework that is clear, consistent, and adaptable to the rapid pace of digital commerce.
