Draft rules mandate KYC, detailed product listings, secure payments for e-commerce platforms

As a part of its initiatives to promote self-regulation among e-commerce platforms, the government released draft guidelines on Tuesday aimed at protecting consumers from potential fraud in the fast-growing digital shopping industry. Stakeholders have been invited to submit their comments on the proposal by 15 February.

The guidelines, titled ‘E-commerce Principles and Guidelines for Self-Governance,’ were developed by the Bureau of Indian Standards (BIS) under the supervision of the ministry of consumer affairs, food and public distribution.

However, it remains unclear whether the released draft guidelines are part of the broader e-commerce policy that was expected to be introduced after the stakeholder consultations two years ago.

The initiative reflects the government’s commitment to addressing rising concerns over consumer safety and transparency in the digital marketplace as e-commerce continues to grow in India.

E-commerce market

The e-commerce market in India is estimated at $137.21 billion this year and it is expected to reach $363.30 billion by 2030, at a CAGR of 21.5% during the forecast period (2025-2030), as per Mordor Intelligence. Rapid urbanisation is one of the primary factors driving the market’s growth.

According to the draft guidelines, the rapid growth of e-commerce has brought about new challenges, especially concerning consumer protection and trust. In this context, the need for clear and effective rules and norms for self-governance in the e-commerce sector has never been more critical. The guidelines aim to establish a framework that fosters transparency and accountability, ensuring a safer and more reliable online shopping environment for consumers.

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The framework introduces three-phase principles covering pre-transaction, contract formation, and post-transaction stages for e-commerce operations.

Under the pre-transaction requirements, e-commerce platforms must carry out comprehensive Know Your Customer (KYC) procedures for their business partners, particularly third-party sellers. The guidelines also mandate that product listings be detailed, including the product title, seller contact information, identification number, and supporting media such as images or videos. These measures are designed to help consumers better assess the utility and features of products, fostering greater transparency and trust in the online shopping process.

Transaction records

For imported goods, platforms must prominently display importer, packer, and seller details. During contract formation, platforms must record consumer consent, enable transaction review, and maintain transparent policies for cancellation, returns, and refunds.

The guidelines also require that complete transaction records be maintained and made accessible to consumers, in accordance with applicable laws. Additionally, they mandate that e-commerce platforms offer different payment options such as credit and debit cards, mobile payments, e-wallets, and bank transfers.

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Furthermore, the guidelines emphasize the need for full disclosure of any processing charges, ensuring that consumers are fully informed about the costs involved in their transactions. This will enhance transparency and consumer confidence in the e-commerce ecosystem.

Platforms must implement secure payment systems with encryption and two-factor authentication. The draft requires clear disclosure of duration, intervals, and amounts for recurring payments, along with simple opt-out procedures.

Products available on platform

It also requires e-commerce players to process Cash-on-Delivery (COD) refunds according to the consumer’s preferred method.

The post-transaction guidelines specify clear timelines for refunds, replacements, and exchanges, with additional provisions addressing counterfeit products. E-commerce platforms are also required to ensure timely delivery notifications, regardless of whether the delivery is handled internally or by third-party providers. These measures are designed to improve customer satisfaction and ensure that consumers have a seamless post-purchase experience.

The draft guidelines prohibit the sale of banned products and mandate that platforms establish monitoring mechanisms and conduct thorough background checks on sellers.

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Additionally, a ready-made list of banned products must be provided during the seller onboarding process. The guidelines also require platforms to implement consumer reporting mechanisms, enabling users to report violations effectively. These provisions aim to enhance compliance and ensure that e-commerce platforms uphold safety and legal standards.

Platforms must conduct periodic seller reviews to maintain listing accuracy. All consumer reviews and ratings must comply with IS 19000:2022 standards for online consumer reviews, covering collection, moderation, and publication processes. The guidelines also emphasize data protection compliance throughout e-commerce operations.