The Indian e-commerce market has witnessed excellent growth over the past decade, which is driven by the element of affordable internet, digital payments and consumer convenience and comfort. Whether you are planning to launch your own online store, business or want to sell through marketplaces such as Amazon, Flipkart or Meesho, compliance with various legal and regulatory norms is important.
Before the selling of your first product through an online process, your business must obtain certain licenses and the registrations as required by Indian laws. These licenses ensure that your operations are legitimate, tax-compliant and reliable and trustworthy in the eyes of customers and various legal authorities.
In this blog, we will discuss in detail the licenses required to start an e-commerce business in India, along with their purpose, issuing authority, and application process.
1. Business Registration – The Foundation of Your E-Commerce Venture
The very first step to establish any type of e-commerce business is to choosing and registering the right business structure and framework. which will depend on your scale, investment, and future plans, you can opt for one of the following:
- Sole Proprietorship: Suitable for small businesses and individual sellers. Registration is simple — a PAN, Aadhaar, and bank account in the business name are sufficient, along with GST registration.
- Partnership Firm: If you have partners, you can register under the Partnership Act, 1932. It is preferable to have a written partnership deed.
- Limited Liability Partnership (LLP): It offers the element of limited liability protection to all the partners and is registered with the Ministry of Corporate Affairs (MCA).
- Private Limited Company Registration: The most preferred and desired structure and framework for the startups and scalable e-commerce businesses. It allows the various external funding, limited liability and the greater brand credibility.
2. Goods and Services Tax (GST) Registration
The process of GST registration is very important for e-commerce businesses in India. If you sell goods or the services online through your own website or via marketplaces like Amazon, Flipkart, or Myntra, you must obtain a GST number regardless of your turnover.
The GST number allows you to:
- Collect and remit GST from customers.
- Claim input tax credit.
- Conduct interstate sales legally.
- Comply with marketplace TCS (Tax Collected at Source) requirements.
Where to apply:
You can apply for GST registration through the GST portal by submitting business proof, address proof, bank account details, and PAN.
3. PAN and TAN Registration
A Permanent Account Number (PAN) is a unique tax identity for your business. Every entity, whether it’s a sole proprietor, partnership or the company, it must have its own PAN.
If your business deducts the taxes at source (for example, on salaries or the contractor payments), you will also need a Tax Deduction and the Collection Account Number (TAN).
These can be obtained from the Income Tax Department through the NSDL official portal.
4. FSSAI Licence – For Food and Beverage Sellers
If your e-commerce store is that who deals with the products such as food products, packaged foods, groceries, or beverages, you must need to obtain a license or registration from the Food Safety and Standards Authority of India, viz., (FSSAI).
Every entity who involved in the process of manufacturing, storing, distributing or selling food must be registered with FSSAI.
The type of license which depends on the scale of operations:
- Basic registration – for small sellers with turnover below ₹12 lakh.
- State license – for medium-scale operations.
- Central license – for large-scale or multi-state operations.
You can apply on the FSSAI portal with KYC documents, proof of business address, and product details.
5. Import Export Code (IEC)
If you desire to import the goods from the abroad or export products at international level, you must need to obtain an Import Export Code (IEC) from the authority of Directorate General of Foreign Trade (DGFT).
The IEC is basically a 10-digit number that allows you to clear the shipments through customs and receive the international payments.
The registration process is online on the DGFT website, and the code is generally issued within 1–2 working days.
6. Udyam (MSME) Registration
The Government of India encourages and support the small and medium enterprises through the help of Udyam Registration (which is earlier known as MSME registration).
Although its optional, but it provides various benefits, such as: –
- It provides easy access to the government loans and various other subsidies.
- Protection against delayed payments.
- Eligibility for various government tenders.
- Lower interest rates from banks.
If your e-commerce business qualifies for the micro, small or the medium enterprise, you can easily register free of cost on the Udyam portal.
7. Shop and Establishment Registration / Trade Licence
Every commercial establishment, including e-commerce offices, warehouses or the local fulfilment centres, must comply with the required Shop and Establishment Act of the respective state which will depends on their compliance.
A trade licence or shop and establishment registration is issued by the local municipal corporation or state labour department. It ensures that your business complies with local labour laws, working hours, and employee welfare norms…!
The process and documentation vary from state to state but typically require proof of address, PAN and business incorporation certificate.
8. Trademark Registration – Protect Your Brand Identity
In the highly competitive e-commerce space, your brand name, logo, or tagline is your biggest asset. To prevent others from copying or misusing your brand, you should obtain Trademark Registration under the Trade Marks Act, 1999.
Trademark registration provides:
- Exclusive ownership of the brand name or logo.
- Legal protection against infringement.
- Higher valuation and credibility during expansion.
You can apply online through the IP India portal, and the registration is valid for 10 years, renewable indefinitely.
9. Payment Gateway Compliance (PCI DSS / RBI Guidelines)
To accept the payments through online mode, your e-commerce business must need to integrate with a payment gateway or the payment aggregator. These entities are regulated by the Reserve Bank of India (RBI).
While the payment gateway handles most of the compliance, you must ensure:
- KYC verification while onboarding.
- Data protection under PCI DSS (Payment Card Industry Data Security Standard).
- No storage of sensitive card details on your own servers.
10. Product-Specific Licences (If Applicable)
Certain product categories are regulated by specific authorities. If your e-commerce platform deals in such products, additional licences may be required:
- Cosmetics or Drugs: Drug Licence under the Drugs and Cosmetics Act, 1940.
- Electronics or Electrical Goods: BIS certification and e-waste compliance (CPCB).
- Toys, Helmets, or Steel Products: Bureau of Indian Standards (BIS) mark.
- Jewellery: BIS Hallmarking registration.
Always verify applicable product laws before listing regulated goods online.
Conclusion
To start an authorized e-commerce business in India requires more than just a good product and website, it requires legal readiness and willingness. By obtaining the right and required licenses and the registrations, you can easily ensure the smooth operations, avoid penalties and easily build long-term trust with the customers and partners.
In short, you can easily begin with the business registration and GST, then secure the FSSAI (if applicable in your case), IEC and shop licence, which is followed by trademark and the payment compliance. Once all of these essentials are in the place, then you can easily focus entirely on the scaling of your business confidently and legally.
