Draft BIS norms spark debate over cost burden on small sellers

Time of India

10 hours ago

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India's booming e-commerce sector, expected to reach $315-330 billion by 2030, is facing regulatory challenges that industry leaders warn may slow its growth trajectory.At a webinar hosted recently by the Policy Consensus Centre ( PCC ) on August 14, 2025, policy experts and sellers voiced a common concern: the growing web of overlapping rules, particularly the Bureau of Indian Standards ' ( BIS ) draft guidelines for retail e-commerce. While the panel acknowledged the need for consumer protection, they cautioned that the draft norms—despite their good intentions—could lead to the duplication of existing laws and increase compliance costs for small businesses. This, they warned, could ultimately undermine the very entrepreneurs the digital marketplace is meant to empower, especially those from the MSME ecosystem.E-commerce has transformed from an 'experimental curiosity' two decades ago to nearly 7% of India's retail market today, said Arindam Goswami, Co-founder and Partner, Policy Consensus Centre. But with that growth has come 'a mixed bag of overlapping and often duplicative obligations' imposed by multiple ministries and regulators. 'Overregulation of platforms will inevitably trickle down to sellers, mostly MSMEs and home-grown entrepreneurs,' Goswami stated, emphasising that regulation must be proportionate, coherent, and mindful of the realities faced by micro-sellers.A crucial aspect of the deliberation involved the draft guidelines proposed by the Bureau of Indian Standards (BIS). Aimed at strengthening consumer trust through uniform practices, it has drawn a mixed response. Although the intent of the proposal garnered significant backing, the panel identified potential redundancies with current regulations outlined in the Consumer Protection (E-Commerce) Rules, along with forthcoming data protection legislation.Sudden enforcement continues to be one of the most significant challenges for small sellers. 'BIS confiscations brought my business to a standstill for weeks,' said Amandeep Budhiraja, founder of Lucky Sales and brand owner of JustToyz. The high-resolution image requirement, he noted, is unworkable for household sellers who 'don't even have the equipment' for professional product shoots. A simple photo shoot can cost Rs 2,000—more than the value of many items sold online.Budhiraja also flagged practical contradictions: BIS inspectors advising traders not to open and inspect products before sale, even if returns later reveal defects, and sellers having to repeat identical tests to meet multiple standards for domestic and export markets. 'The umbrella should cover it all,' he argued, 'otherwise micro sellers can't even think of exporting.'From a legal standpoint, the question is whether BIS is straying into operational regulation better left to existing laws, according to panellists. 'Our existing rules are sufficient,' said Shashi Mathews, Partner at IndusLaw. 'With established rules already in place, adding duplicate layers of regulation serves little purpose. Platforms, as intermediaries, cannot be held fully responsible for the entire supply chain. Piling on more obligations risks pushing sellers out of the ecosystem,' he said, pressing for international reciprocity so products meeting global standards don't need duplicative Indian certification.Swapnil Yadav, Senior Manager (Public Policy) at NASSCOM, took a pragmatic line. While some provisions are duplicative, he said, others address gaps—such as explicit anti-counterfeiting measures—and should be retained. But requiring platforms to disclose material composition or environmental impact, he cautioned, is unrealistic when small sellers often lack that data.'The responsibilities need to be redistributed between platforms and sellers,' Yadav argued, adding that intermediaries like logistics providers should also be covered. He called for technology to bridge the compliance divide: 'Tech should be an ally, not create a digital cleavage between large and small players.'Dharmender Jhamb, Partner & Leader-Fintech at Grant Thornton Bharat LLP, highlighted India's pioneering role in regulating 'dark patterns'—deceptive design practices that mislead users into unintended purchases. 'Transparency before a purchase, clear consent mechanisms, and robust dispute resolution are positives in the BIS draft,' he said, adding that they build trust, which is beneficial for the long-term health of e-commerce. However, Jhamb warned that small firms lack the tools to self-audit for such patterns and called for government-approved toolkits to avoid compliance uncertainty.The BIS draft's prohibition on 'preferential treatment' by marketplaces stirred debate. Competition lawyer M.M. Sharma supported the intent, saying it could address issues like platforms promoting their private labels over independent sellers. But others noted that preferential placement is common in offline retail and argued that distinguishing between legitimate and anti-competitive preference is critical.With global trade headwinds and domestic cost pressures, panelists urged the government to use this moment to rationalise the rulebook. 'Targeted deregulation and streamlining could be the growth catalyst the sector needs,' said Goswami. The panellists further highlighted that the issue also has export implications: easing compliance for B2C shipments could open global markets to small Indian sellers, especially if AI and automation are used to meet product display and disclosure requirements at low cost.With the BIS draft still under consultation, much will depend on how the final framework balances consumer protection with ease of doing business. For an industry projected to power the next phase of India's retail growth, the outcome could define whether regulation becomes a growth enabler or a brake on innovation, panelists said. Despite diverging views on specific provisions, the panelists further converged on a few shared principles. They agreed that regulation is necessary, but it must steer clear of duplication. Consumer trust, they emphasised, rests on transparency rather than bureaucratic overload.