Sudden Enforcement Actions Hurting Small Sellers: PCC

India’s e-commerce sector, projected to touch $315–330 billion by 2030, risks slowing its momentum unless regulators streamline overlapping rules and ease compliance burdens on small businesses. During a recent webinar hosted by Policy Consensus Centre, industry leaderscalled for a single, harmonised regulatory framework that protects consumers without stifling innovation.

Legal experts and policy specialists warned that fragmented oversight by multiple agencies could create unnecessary barriers, especially for MSMEs already navigating volatile economic conditions. A key point of discussion was the draft guidelines by the Bureau of Indian Standards(BIS). Aimed at strengthening consumer trust through uniform practices, it has drawn a mixed response. While its intent found broad support, panellists flagged overlaps with existing provisions under the Consumer Protection (E-Commerce) Rules and upcoming data protection laws.

“E-commerce now makes up about 7% of India’s retail market. But as the sector has expanded, so has its regulatory web. Overregulation of platforms will inevitably trickle down to sellers, mostly MSMEs and homegrown entrepreneurs; creating unintended hurdles. While regulation is necessary, it must be proportionate, coherent, and mindful of the realities faced by MSMEs and micro sellers,” said Arindam Goswami, Co-Founder &Partner, Policy Consensus Centre.

Adding a ground-level perspective, Amandeep Budhiraja, owner of JustToyz, said:“BIS confiscations brought my business to a standstill for weeks. Regulations need to be customer-centric, the goal should be to make it simple for customers to understand what they’re buying. Sudden enforcement not only hurts small sellers like me but also disrupts supply and erodes trust in India’s digital marketplace.”

Dharmender Jhamb, Partner & Leader – Fintech at Grant Thornton Bharat LLP, cautioned: “Regulation with the right reg tech tools for accurate compliance checks enables firms with accurate and absolute compliance with clear and practical mechanisms for continuous compliance implementation.”

Legal experts argued that the existing framework is already robust. “With established rules already in place, adding duplicate layers of regulation serves little purpose. The focus should be on enabling ease of business, not piling on compliance burdens,” said Shashi Mathews, Partner at IndusLaw.

Voicing concerns in the tech sector, Swapnil Yadav, Senior Manager (Public Policy) at NASSCOM, warned, “The BIS draft standard aims to enhance consumer protection by promoting fair business practices, anti-counterfeiting measures, and increased disclosures, though certain disclosures like environmental impact and material composition may be challenging due to limited platform information; it must also consider legitimate business practices that do not compromise consumers while fostering investment and growth.”

With global trade headwinds and MSMEs already battling cost pressures,panellists urged policymakers to time interventions carefully. Targeted deregulation and a more streamlined rulebook could be the growth catalysts the sector needs.