New e-commerce rules may burden small sellers

Industry executives as well as merchants have said the Government’s amended e-commerce rules, while well-intentioned on consumer protection and transparency, could impose a disproportionate compliance burden on small sellers and MSMEs who form the bulk of sellers on online marketplaces, particularly around ranking disclosures and price-history requirements.

The Consumer Protection (E-Commerce) (Amendment) Rules, 2026, notified by the Department of Consumer Affairs, will come into force from January 1, 2027, replacing the 2020 rules. The amended framework covers disclosure of ranking parameters, sponsored listings, a new “prior price” requirement for discount claims, compliance with the 2023 dark patterns guidelines, and mandatory partnership with the National Consumer Helpline.

A senior industry executive said the broad objective of strengthening consumer protection and transparency is welcome, but some of the provisions need closer examination from the standpoint of the small sellers and merchants who would have to comply with them.

The executive said requirements around disclosure of ranking parametres, particularly the relative importance of different parameters, could be difficult for small and unorganised sellers to navigate, and that a more granular disclosure regime could end up favouring larger, better-resourced sellers who are better placed to interpret and respond to it.

On the pricing provision, the executive said the requirement needs more thought because it is individual sellers, not the marketplace, who set and frequently change prices. A 30-day lowest-price disclosure requirement would mean sellers and merchants, particularly small businesses without dedicated compliance teams, would need to track and maintain accurate price history, adding to their operational load.

On dark patterns, the executive said the industry understands and supports the government’s objective of making the sector more accountable for consumer experience, and that an annual self-audit is a reasonable way of doing that. The point for discussion, the executive said, is how the certification is framed, so that the compliance steps it entails do not end up being passed down to small sellers and merchants who already operate with limited compliance capacity.

More broadly, the executive said policymakers should keep in mind that marketplaces are an important channel for bringing small businesses, merchants and MSMEs into India’s digital economy, and that regulation should strengthen consumer trust without inadvertently making it harder for these businesses to participate in digital commerce.

The focus, the executive said, should be on ease of doing business for small sellers and merchants navigating these new requirements.

In a statement, a Flipkart spokesperson said: “We welcome the Government’s focus on strengthening consumer protection and transparency in e-commerce. As a customer-centric marketplace, we remain focused on building consumer trust while enabling lakhs of sellers, including small businesses, MSMEs & farmers, to participate in India’s digital commerce economy. We will study the detailed provisions and continue to engage with the Government to ensure the framework strengthens consumer protection while supporting the growth of digital commerce.”