Abhineet Pratap Singh Feb 17,2021 0

Statute and Laws Related to E-Commerce Industry in India

The e-commerce Industry has intrinsically become an indispensable segment of the population’s everyday life. The accessibility to any ecommerce website is not a privilege nowadays, instead it has become the need for everyone. Ecommerce has captured that part of the life of people that the masses have become dependent on it. There are various e-commerce platforms which are eventually concerned to every facet of life whether we say the shopping of household items, electronic items or dealing with property brokerage.


Here, in this blog we will walk through the extensive rules and regulations connected to the e-commerce business in India.


Foreword to E Commerce 

Today, the number of internet users have increased in volumes since the internet has hit India. With the everyday escalation in people’s orientation towards setting up their own businesses, the online prospective for business origination has come into effect. 


E commerce is basically regulating a business online rather than conventionally through physical means. ECommerce has become a new way of conducting businesses. The transition to online shopping in place of traditional procedure for shopping is taking a long stretch of time. The e commerce business doesn’t only spell out the buying and selling of the products over the internet but also innumerable number of processes carried out by the individual organizations. 

E Commerce: A Flourishing Sector in India

For the currently developing countries like India, e commerce is an exponentially booming sector and also has made up a leeway in the country. Here in the second most populated country, e-commerce is still at a growing stage and will take several years to take up the flight. E commerce is the method of incorporating electronic and virtual communications in the course of business transactions. 


One of the primary sites to start the e commerce business in India was rediff.com and one of the most searched and most used sites during that time. Coping with the times, there has been a significant rise in the volume of businesses enabling online businesses and e commerce technologies. 


Amidst the lockdown due to COVID-19, the e-commerce industry saw a voluminous boost, witnessing an elevated strike in the business industry. With people physically lesser stepping into the market for shopping, offline shopping has registered a notable limp. Substantially, smaller businesses are more inclined towards adapting to e-commerce platforms.

Laws Associated with E Commerce Business

E Commerce business has shown a paradigm flux in this digitally advanced world. The welcome and the admiration of the e-commerce business is steered by the customer choice and the customer satisfaction. The customer satisfaction, which is a vital component of any business, was required to be precise and impeccable. The e-commerce business has also improved convenience in the business commercial transactions. 


As e-commerce platforms ladle out to be the mediator between the merchants and the consumers, the business have to impose a legacy of the competent laws and regulations for other businesses. The online businesses have to comply with the state-specific laws and onerous obligations for their smooth run. 


The regulatory laws associated with the e-commerce businesses are:

  • Foreign Direct Investment Policy

  • Foreign Exchange Management Act, 1999

  • Companies Act, 2013

  • Payment and Settlements Act, 2007 and other regulations imposed by RBI concerning online payments.

  • Packaging and Labelling

  • Legal Metrology Act, 2009 compiled with Legal Metrology Rules, 2011

  • Sales, Shipping, Refunds and Returns

  • Rules and Regulations imposed by the respective state or ministry 

The Technology and Data Protection Laws associated with e-commerce business are:

  • Information Technology Act, 2000 compiled with Information Technology Rules, 2011

  • Consumer Protection Act, 1986

  • General Data Protection Regulations

The Legal Laws and Tax analogous to e-commerce business are:

  • Indian Contract Act,1872

  • Indian Copyright Act, 1957

  • The Patents Act, 1970

  • Intellectual Property Issues

  • Labour Laws

  • Income Tax, 1961

  • Goods and Services Tax

  • Double Taxation Avoidance Agreement

Prologue to E Commerce Models 

The traditional models of business in which the e-commerce industry is segregated is as follows:


  1. Business to Consumer (B2C) Model

In the business-to-consumer Model, the merchant sells the products ordered by the consumers directly to the consumers. The customer will select the products according to his preferences and will place the order on the business’s e-commerce website without the hurdle of being present physically at the marketplace. The underlying process includes the rendering of the notification regarding the product order to the customer then validating the credentials via email and further delivery of the required product.


  1. Business to Business (B2B) Model

In the Business-to-Business Model, the merchant sells its products through an intermediary person or company to the final and actual customer. In other words, the Business to Business model sells its goods and services to another business. The seller may get orders through the businesses’ website but deliver the products through its online store.


  1. Consumer to Business (C2B) Model

The obverse of the traditional commercial business to consumer model is the consumer to business model. This model provides the facility to an individual to sell his own products and services to the companies. This comprehensive model is nowadays used by the big companies as connecting and referring to the social media influencers for the purpose of marketing their products and selling them.


  1. Consumer to Consumer (C2C) Model

The Consumer to Consumer business model is a model in which connects consumers to the consumers by selling their goods and services and charging the transaction and the delivery fees. A challenge imposed by this model is regarding quality benchmark and technology maintenance and preservation. 

E Commerce Industry in the Time to Come

The changing graph of the e-commerce industry can be significantly alarming and invigorating at the same time. Every hour of the day, there are changes that may succumb to business’s growth and some are difficult to keep up to. The ecommerce industry is developing  in India at a rapid momentum and the e-commerce industry plays a remarkable role in it. 

In future, the e-commerce industry will tend to encompass the trends in regards to mobile optimization, wearable devices, ads personalization, marketing automation, local marketing and branding. Currently, the Indian Government is also switching its focus upon the e-commerce industry and contributing to its elevation. The development in the e-commerce industry in India has created its importance in financing, training and the growing technology.

All things considered, the growing e-commerce industry in India will prove to be boon for the entire marketing industry.