Traders Push Government to Regulate E-Commerce Sector and Protect Retail Sector

India's retail and wholesale trader community has escalated calls for comprehensive policy changes to address the expanding reach of major online shopping platforms, citing mounting threats to the financial viability of countless traditional businesses. The Federation of All India Vyapar Mandal (FAIVM), which represents traders nationwide, has formally presented a memorandum to the Prime Minister, Union Finance Minister, and Union Commerce Minister, requesting an India-specific regulatory structure designed to create fair competition between digital marketplaces and brick-and-mortar retailers.

National President Jayendra Tanna and National General Secretary CA R. K. Gaur, who serves as a member of the National Trade Welfare Board under the Government of India, have called on the Centre to implement urgent policy measures to preserve the country's retail landscape.

The traders' organization has highlighted persistent concerns including below-cost pricing strategies, excessive discounts, preferential arrangements for particular vendors, and exploitative market conduct that have systematically favored major online retailers. Despite recognizing that e-commerce represents a vital component of India's economic development, FAIVM contends that digital innovation should not undermine fair business opportunities for the millions of local retailers who contribute significantly to job creation and community-level economic growth.

Strengthening its position, FAIVM has referenced recent international actions, particularly the European Union's implementation of a set customs duty on low-value imported packages beginning July 1, 2026. The organization views this development as evidence that established economies are reinforcing oversight of international online commerce to protect their domestic markets, strengthen border tax collection, and increase state revenues. Rather than simply adopting these international approaches, FAIVM has recommended that India study global regulatory practices and construct a framework suited to India's distinctive retail structure and economic requirements.

The memorandum outlines establishing a specialized Expert Committee drawing participation from the Finance Ministry, Commerce and Industry Ministry, Consumer Affairs Ministry, GST administration, academic economists, digital sector specialists, and industry bodies. This committee would assess potential policy solutions, including suitable tax or regulatory mechanisms for online sales, improved compliance with tax obligations, strengthened protections for shoppers, and conditions that encourage transparent market functioning while maintaining space for digital sector growth.

FAIVM projects that such measures would produce significant economic gains by fostering genuine competition among retailers of all types, enhancing tax collection compliance, preventing revenue erosion, generating new income for the government, and safeguarding employment throughout India's retail sector. The group further maintains that measured regulation would reinforce government priorities including Vocal for Local and Atmanirbhar Bharat while holding digital and conventional businesses to equivalent competitive requirements.

Emphasizing that its position targets unfair market dynamics rather than technology or online commerce itself, FAIVM has requested immediate action from the government. The organization has asked the Centre to conduct a thorough examination of current regulations and formulate an India-focused framework for taxation and oversight following consultations with relevant parties.

Jayendra Tanna and CA R. K. Gaur have expressed optimism that a well-designed regulatory approach will support equitable market competition while protecting the concerns of millions engaged in retail and wholesale activities across the nation. With momentum building around discussions concerning the direction of India's retail economy, the memorandum is anticipated to amplify demands for increased regulation of the nation's rapidly growing e-commerce landscape and its consequences for small business operators.