BIS proposes guidelines to regulate online retail practices

The Bureau of Indian Standards (BIS) has released a draft document that outlines principles for self-governance in the ecommerce sector. The initiative is designed to promote ethical practices, protect consumer interests, and create a more equitable environment for businesses.

The draft, titled ‘E-Commerce: Principles and Guidelines for Self-Governance’, comes amid growing concerns over consumer protection and trust erosion. By setting clear norms, the BIS seeks to curb unethical practices while promoting transparency and accountability across platforms. Stakeholders involved in the segment are encouraged to provide their feedback on the proposed norms before February 20, 2025.

Key proposals

The proposed standards take an approach to regulating the entire transaction lifecycle in ecommerce. In the pre-transaction phase, platforms are required to ensure thorough seller verification, provide detailed product descriptions, and display transparent pricing that includes taxes and delivery costs. 

Additionally, the guidelines mandate the inclusion of clear safety, environmental, and usage information to help consumers make informed decisions. During the transaction phase, platforms must obtain explicit consumer consent and provide a review of all transaction details before final confirmation. Emphasis is placed on secure payment options and full disclosure of any associated charges to ensure trust and transparency. 

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Post-transaction practices are equally robust, with mandatory mechanisms for handling refunds, returns, and grievance redressal. Platforms are advised to address counterfeit products and maintain timely delivery updates to improve consumer experience.

Central to these standards is a strong focus on consumer welfare. Platforms are required to clearly disclose seller information, including details for grievances and customer support, ensuring that consumers have access to necessary resources. The guidelines emphasise compliance with data protection laws, restricting the use of personal data to disclosed purposes only. Transparency in consumer reviews and ratings is prioritized, with platforms obligated to adhere to prescribed standards to ensure authenticity and reliability. Collectively, these measures aim to foster a trustworthy and accountable ecommerce ecosystem. 

Deteriorating experience 

A recent survey from LocalCircles, a community-based social media platform, underscores the urgency of the measures proposed by BIS. A survey involving over 100,000 respondents across India revealed that 48% of consumers had received incorrect products in the past year, with many unable to secure returns or refunds due to restrictive platform policies. 

Additionally, 20% reported receiving counterfeit items, primarily in the footwear, cosmetics, and fragrance categories. Only 39% of those who encountered counterfeit goods managed to secure replacements, while 43% found no clear way to report the issue.

These challenges highlight significant gaps in consumer redressal mechanisms, even as ecommerce continues to expand in India.

The sector, currently valued at $70 billion, represents around 7% of the nation’s total retail market, with projections indicating exponential growth driven by increased internet access and rural smartphone adoption. By 2030, the number of online shoppers in India is expected to reach 500 million, according to Invest India.

The draft standards emphasise consumer-centric practices, requiring platforms to clearly disclose seller information, streamline return and refund policies, and address counterfeit goods more effectively. While Amazon emerged as the most preferred platform for ease of returns, others like Meesho and Tata Neu ranked poorly in consumer feedback. Among quick-commerce platforms, Bigbasket led in customer satisfaction for returns and refunds, followed by Swiggy Instamart and Blinkit.