Chennai, Aug 5:
Leading retailers, trader associations and policymakers on Tuesday flagged the alarming rise of illicit trade and the increasing prevalence of unfair market practices in India’s online retail ecosystem.
At a seminar organised by the Federation of Retailers Association of India (FRAI) Tamil Nadu State Chapter on “Confronting Illicit Trade in Modern Markets” retailers, trader associations and policymakers together deliberated on two rapidly growing threats impacting India’s retail ecosystem — the alarming rise of illicit trade and the increasing prevalence of unfair market practices.
The participants expressed serious concern over the growing circulation of counterfeit products, illegal distribution channels and non-compliant goods across markets, while also highlighting how predatory pricing, deep discounting and unchecked expansion of certain quick commerce and e-commerce models are creating severe imbalances for small retailers and traditional businesses.
The seminar highlighted that both illicit trade and unfair market practices are adversely affecting genuine businesses, government revenues, consumer trust and the livelihoods of lakhs of small traders across the state.
In his address, FRAI TN Chapter President C.Chelladurai said “Illicit trade is no longer merely a commercial issue; it has become a serious threat to consumer safety, fair competition and the livelihoods of millions of honest retailers. Counterfeit and illegally sourced products not only expose consumers to substandard and unsafe goods but also undermine the credibility of legitimate businesses that operate within the law. We remain committed to working closely with the government, law enforcement agencies and industry stakeholders to strengthen enforcement, raise consumer awareness and build a transparent retail ecosystem where genuine businesses can thrive.”
Retailers further highlighted that while quick commerce and e-commerce platforms are rapidly transforming the retail landscape and making products instantly accessible to consumers, the same ecosystem is also creating serious concerns around the rapid spread of illicit trade and counterfeit products.
Participants also stated that flash sales, unrealistic discounting, aggressive pricing strategies and the constant push for ultra-fast delivery have created an environment where consumers are often unable to differentiate between genuine and counterfeit products.
They also pointed out that today almost everything — from food products, groceries and personal care items to skincare products, electronics and even premium mobile phones worth thousands of rupees — is being delivered within minutes through quick commerce and e-commerce platforms. However, this extreme accessibility and race for cheaper prices are also opening dangerous entry points for banned, illegal and counterfeit products to penetrate the market at an unprecedented scale.
According to the retailers, illicit traders and unethical sellers are increasingly exploiting these rapidly expanding digital platforms to push counterfeit and non-compliant products into the market, taking advantage of weak monitoring mechanisms and the growing consumer obsession with deep discounts and instant availability. Retailers warned that consumers are gradually becoming more price-sensitive than quality-conscious, creating fertile ground for illicit trade to flourish unchecked across digital commerce channels.
While the rapid rise of such platforms is adversely impacting consumers through the circulation of low-quality and potentially unsafe products, it is equally devastating for genuine offline retailers who spend years building trust, ensuring product authenticity and serving their local communities with accountability.
Retailers emphasised that unfair market practices, uneven competition and aggressive pricing structures are making it increasingly difficult for traditional traders to survive despite working tirelessly for 14 to 18 hours every day to sustain their businesses, educate their children and support their families. Participants stressed that this is no longer merely a business issue, but a serious social and livelihood concern affecting millions of honest small retailers across the country.
During the seminar, participants highlighted that the rapid expansion of platform-driven retail models and the growing circulation of counterfeit and non-compliant products are creating serious challenges for traditional businesses. Retailers said while small traders operate with limited margins and high accountability, several large platforms continue to dominate markets through aggressive discounting and rapid expansion strategies, while cautioning that illicit trade and counterfeit goods are harming genuine businesses, weakening consumer trust and adversely affecting the livelihoods of millions of small retailers across the country.
Acknowledging the importance of technology and innovation, they stressed that growth in the retail sector must remain fair, transparent and inclusive.
The participants collectively called for stronger regulatory oversight, fair competition policies and a level playing field for small retailers. They also urged policymakers to ensure measures that ensure complete eradication of illicit and illegal products in the online retail ecosystem, while making a collective appeal to the government, policymakers and industry stakeholders to protect the interests of small retailers and preserve India’s traditional entrepreneurial ecosystem, which continues to play a critical role in employment generation, local commerce and economic stability.