Compliance watch-outs
The six watch-outs the brochure lists for this sector come first. The points after them come from other pages of the brochure, gathered here so a reader has the risks in one place. The dated changes behind them are on recent changes.
Sourcing is self-certified, then audited
Above 51% FDI, a single-brand retail entity self-certifies the 30% India-sourcing test, and statutory auditors check it against certified accounts. The test runs as a five-year average from 1 April of the year the first store or online sale starts, then annually. Track purchases by brand from the first year; a gap in early records cannot easily be rebuilt.
Marketplace neutrality tests
A marketplace with FDI must not own or control inventory. A vendor buying over 25% of its purchases from the marketplace group is deemed controlled. Sellers in which the group holds equity cannot sell on the platform, and the platform cannot influence prices or offer exclusivity. A statutory auditor’s report on compliance is due by 30 September each year.
Wholesale is not retail
Cash-and-carry sales must go to businesses holding tax registration or trade licences, or to institutions for their own use, with day-to-day records. Sales to group companies are capped at 25% of turnover. A business that also runs retail needs separate audited books for it.
Dark patterns and consent
The 2023 guidelines list 13 dark patterns. The CCPA fined two companies in June 2026 for pre-ticked consent and similar designs, and it urges all platforms to follow the 26 that declared dark-pattern self-audit compliance (PIB, 20 Nov 2025 and 3 Jun 2026).
Gig and platform workers
Under the Labour Codes, aggregators contribute 1–2% of annual turnover to social security, capped at 5% of the amounts paid to gig and platform workers. Quick-commerce and delivery models should budget for it. See Labour Codes and social security.
Land-border owners above 10%
An investor from a land-border country, or a beneficial owner from one with more than 10% or control, moves the investment to the Government route, even for single-brand retail. Up to 10% without control stays automatic, with prior reporting. Applications go through the FIF portal on NSWS (Press Note 2 (2026), 15 March 2026).
Other points to watch
Inventory e-commerce is open for exports only
Press Note 3 (2026) lets marketplace entities with FDI hold inventory to export goods made or produced in India, from 3 September 2026. Inventory-based selling to Indian consumers remains closed to FDI. A platform running both models needs to keep them apart.
Multi-brand retail is limited to consenting states
Multi-brand retail outlets are allowed only in the states and union territories that have agreed to FDI in multi-brand retail. Tamil Nadu and Uttar Pradesh are not on the list. The minimum investment is USD 100 million, and multi-brand retail with FDI may not sell through e-commerce.
Online first means stores within two years
A single-brand retailer may start online before opening stores, but the stores must open within 2 years of the start of online retail.
Country-of-origin filter for imported goods
From 1 July 2026, under G.S.R. 128(E) of 13 February 2026, e-commerce entities selling imported packaged goods must offer a searchable, sortable country-of-origin filter.
Data protection phase-in
The DPDP Rules 2025 were notified on 13 November 2025 with 18 months for phased compliance. Retailers holding customer data are data fiduciaries and must issue separate, clear consent notices.
Product approvals by category
Each category a brand sells can bring its own regulator: CDSCO for cosmetics (target 90 days), FSSAI for food, Legal Metrology for pre-packed goods and BIS for goods under a Quality Control Order. Map them before the first import (see regulators).
Offshore sellers still face tax nexus
The 2% equalisation levy on e-commerce supplies ended in August 2024 and the 6% levy on online advertising from 1 April 2025. Income can still be taxed in India through significant economic presence or a permanent establishment.
Treaty claims and GAAR
Treaty exemptions on capital gains are open to challenge under GAAR, following the Tiger Global decision of January 2026. Exit planning for a retail subsidiary should not assume treaty relief.
State policies on extension
Haryana’s Logistics, Warehousing & Retail Policy 2019 expired on 8 March 2024 and was extended by the state cabinet in January 2025 until a new policy is notified. Confirm current terms before relying on it (see state incentives).
Closed central windows
The fourth-round window of the PLI for white goods closed on 14 October 2025 and the textile PLI window ended on 31 March 2026. Mega Food Parks were discontinued from 1 April 2021, though operational parks still take food processors (see central incentives).
Two figures of USD 80 bn
The online retail market (about USD 80 bn, FY2025-26, IBEF) and Amazon’s goal of USD 80 bn of e-commerce exports by 2030 are different measures. Keep them apart in any business case.
What to check next
- Set up brand-level purchase records from the first year, ready for statutory auditor review of the 30% sourcing test.
- For a marketplace, test each vendor against the 25% purchase threshold and the group-equity bar, and diarise the 30 September auditor’s report.
- Run a dark-pattern review of checkout and consent flows against the 13 listed patterns.
- Budget the aggregator social-security contribution if the model uses gig or platform workers.
- Confirm the ownership chain has no land-border beneficial owner above 10% or with control before relying on the automatic route.