Introduction
The e-commerce ecosystem in India has experienced significant growth in recent years. As per a recent report, the e-commerce market in the country is projected to grow at a compound annual growth rate (CAGR) of 10% and reach USD 550 billion by 2035[1].
However, due to the largely unorganised nature of the sector, there has been no robust legal framework for its effective governance. The Consumer Protection (E-Commerce) Rules, 2020, issued by the Ministry of Consumer Affairs, Food, and Public Distribution was an important step toward bringing some order, however, there continued to be a gap for comprehensive regulation of e-commerce operations.
This paved the way for the introduction of ‘E-Commerce – Principles and Guidelines for Self-Governance’ (‘Guidelines’) by the Bureau of Indian Standards, which are not only well-intentioned but also comprehensive. Considering the rapid expansion of the sector, such structured approach to self-regulation was necessary to address concerns regarding consumer protection, fair trade practices, and data privacy. The article in this issue of BIS Amicus delves into key aspects of these Guidelines issued earlier this year and notes some strategic implications for Indian businesses.
Scope and objectives of the Guidelines
The Guidelines aim to regulate e-commerce transactions by setting principles applicable at various stages of an online purchase, including the Pre-Transaction, Contract Formation, and Post-Transaction phase. These principles cover aspects such as seller verification, product listing requirements, transaction security, consumer grievance redressal, and fair competition. The objective is to build an ethical e-commerce environment that fosters consumer confidence while ensuring business accountability.
An overview of the three stages discussed above in the context of the E-commerce Guidelines has been provided hereinbelow:
Another notable feature of these Guidelines is their focus on self-governance, meaning that compliance is voluntary rather than legally mandated.
Merits of the Guidelines
The introduction of self-regulatory principles through these Guidelines presents several advantages for both consumers and businesses.
I. Enhanced consumer protection and market transparency
A fundamental strength of the Guidelines is their emphasis on consumer protection. E-commerce platforms are required to disclose clear and comprehensive information regarding product specifications, pricing breakdowns, return and refund policies, and seller details. Such transparency helps consumers make informed choices and reduces instances of misleading advertisements and fraudulent transactions.
The Guidelines also introduce measures to combat counterfeit products, ensuring that platforms establish mechanisms for reporting and taking action against fake or substandard goods. This is particularly beneficial in the light of increasing concerns regarding the sale of counterfeit items through online marketplaces.
II. Fair competition and non-discriminatory practices
One of the most significant provisions of the Guidelines is the prohibition against preferential treatment. Many large e-commerce platforms have been accused of favouring certain sellers—especially those affiliated with the platform itself—by offering them better visibility, pricing advantages, or exclusive deals. The Guidelines mandate that all sellers be treated equally, ensuring a level playing field and preventing monopolistic tendencies in the e-commerce sector.
Additionally, the Guidelines discourage price manipulation and unfair bundling of services, ensuring that consumers have access to genuine discounts and competitive pricing without hidden conditions or forced add-ons.
III. Robust seller verification and accountability
By requiring comprehensive Know Your Seller (‘KYC’) norms, the Guidelines impose a duty on e-commerce platforms to verify seller credentials before permitting them to list products. This reduces instances of fraudulent sellers exploiting online platforms to conduct illicit trade. Moreover, sellers are required to clearly disclose information regarding warranties, refunds, and their own identity, thereby enhancing accountability and trust in online transactions.
IV. Data protection and privacy safeguards
The Guidelines address consumer data protection by ensuring that platforms obtain explicit consent before collecting personal data. Additionally, they restrict the unauthorized sharing or misuse of consumer information for targeted marketing. Given the increasing legal focus on data protection, particularly with the introduction of the Digital Personal Data Protection Act, 2023, these provisions align with global best practices in privacy regulation.
Limitations and challenges
While the Guidelines introduce progressive measures for the regulation of e-commerce, they also exhibit certain shortcomings and challenges that may affect their effectiveness.
I. Absence of legal enforceability
A major limitation of the Guidelines is that they are not legally binding, making compliance purely voluntary. Unlike the Consumer Protection (E-Commerce) Rules, 2020, which impose statutory obligations on online marketplaces, the BIS Guidelines serve only as recommendations.
II. Compliance burden on small and medium sellers
While the Guidelines promote seller verification and transparency, they may increase the compliance burden on small and medium enterprises (SMEs). Many small-scale sellers rely on e-commerce platforms for market access, and stringent documentation and product listing requirements could create barriers to entry. This may favour established players over smaller businesses, contradicting the objective of ensuring fair competition.
Additionally, the requirement for exhaustive product disclosures, compliance with anti-counterfeiting measures, and data protection obligations may prove to be financially and operationally challenging for new or small sellers who lack the resources to meet these standards.
Strategic implications for businesses
Despite their limitations, the Guidelines present opportunities for businesses that proactively align with their principles. Companies that voluntarily adopt these measures can strengthen consumer trust, enhance brand reputation, and mitigate regulatory risks.
E-commerce platforms should focus on strengthening seller verification processes, enhancing transparency in pricing and product information, and ensuring compliance with evolving data protection norms. Establishing robust grievance redressal mechanisms and fair business practices can position businesses favourably in the long run, particularly as regulatory scrutiny over digital commerce intensifies.
Final thoughts
The BIS E-Commerce Self-Governance Guidelines mark an important step toward establishing ethical and consumer-centric e-commerce practices in India. By focusing on transparency, fair competition, and consumer protection, they seek to create a responsible digital marketplace.
The draft’s one-size-fits-all approach, however, overlooks the diverse operational needs of business models, ranging from marketplaces and D2C platforms to subscription-based services. Stringent requirements like exhaustive KYC and detailed pricing disclosures may disproportionately burden the smaller platforms, potentially threatening their sustainability.
Nonetheless, adapting to these principles proactively can ensure regulatory readiness and enhance consumer confidence. As India’s e-commerce ecosystem continues to grow, these Guidelines may influence future mandatory regulations, making early compliance a strategic advantage rather than a regulatory obligation.
[The authors are Partner and Long-term Intern, respectively, in BIS practice at Lakshmikumaran & Sridharan Attorneys]
