E-Commerce & Quick Commerce

The compliance stack for an e-commerce platform includes the IT Act and intermediary guidelines (grievance officer, content moderation, takedown procedures), the Consumer Protection (E-Commerce) Rules 2020 (seller and product disclosures, return policies, grievance redressal), FDI policy restrictions (marketplace vs inventory model for entities with foreign investment), the Legal Metrology (Packaged Commodities) Rules (product labelling requirements for online listings), FSSAI licensing if food products are sold, GST registration and TCS obligations, the DPDP Act for customer and seller data, and ASCI guidelines for advertising and promotional claims. The specific burden depends on whether you operate as a marketplace, an inventory-based seller, or a hybrid.

FDI policy distinguishes between marketplace-based e-commerce (permitted under the automatic route with 100% FDI) and inventory-based e-commerce (not permitted for entities with FDI). A marketplace entity facilitates transactions between buyers and sellers but does not own the inventory. Key restrictions include: the marketplace cannot exercise ownership or control over the inventory, no more than 25% of a seller’s total sales can be through a single marketplace entity or its group companies, the marketplace cannot directly or indirectly influence the sale price, and the platform cannot offer cashback or discounts funded from its own pocket. Violations can result in FEMA enforcement and compounding proceedings. We advise e-commerce companies on structuring operations to comply with FDI policy.

Quick-commerce platforms using dark stores (hyperlocal fulfilment centres) operate in a space where the regulatory characterisation is still evolving. If the platform owns the inventory in the dark store, it may be treated as inventory-based e-commerce, which is restricted for FDI-backed entities. FSSAI licensing is required if food products are stored and sold. The Legal Metrology Act applies to packaged goods. Labour law obligations arise for delivery personnel (employee vs contractor classification). Local zoning and municipal regulations may restrict the operation of dark stores in residential areas. The Consumer Protection Act applies to all consumer transactions. We advise quick-commerce platforms on navigating this evolving regulatory landscape.