The rapid emergence of quick commerce has profoundly reshaped India’s retail and logistics ecosystem. By offering ultra-fast delivery, often within a window of 10 to 30 minutes, platforms operating through dark stores and hyperlocal fulfilment networks have recalibrated consumer expectations and intensified competitive pressures across the market. It is therefore unsurprising that the sector has drawn substantial foreign investment, placing it firmly at the crossroads of technological innovation and regulatory oversight.

While the commercial model continues to evolve, the regulatory framework governing foreign direct investment (FDI) in e-commerce has remained largely static. This divergence has given rise to nuanced compliance challenges, particularly for foreign-funded quick commerce platforms seeking to strike a careful balance between operational speed, commercial control, and regulatory permissibility.

Regulatory Architecture

India’s FDI rules clearly distinguish between marketplace e-commerce, which only connects sellers and buyers and allows 100% foreign investment, and inventory-based models, where owning or controlling goods is treated as retail trading and is subject to restrictions. To safeguard this distinction, marketplace entities and their group companies are prohibited from selling on the platform, controlling inventory, influencing pricing, or granting preferential treatment, with support services required to be offered on an arm’s-length, non-discriminatory basis. This calibrated framework has enabled significant foreign investment while safeguarding domestic retailers.

Quick commerce, while formally subject to e-commerce FDI norms, typically straddles multiple regulated sectors, including wholesale trading, logistics, manufacturing and food safety. As a result, such platforms must also comply with a wider matrix of regulations, including:

the Consumer Protection (E-Commerce) Rules, 2020 to protect consumer interests in online transactions;
the Guidelines for Prevention and Regulation of Dark Patterns to curb unfair trade practices and misleading advertisements; and
norms prescribed by the Food Safety and Standards Authority of India on hygiene, storage and handling of food products at the “dark stores”.

Notably, FDI exemptions for manufacturing entities permit the sale of domestically manufactured (including private-label) products through e-commerce, offering quick commerce players a compliant pathway into retail and aligning with the “Make in India” policy thrust.

Taken together, these regimes both constrain and catalyse the evolution of India’s digital retail landscape. The future trajectory of quick commerce will largely hinge on its ability to align operational innovation with these regulatory guardrails.

Business Models

Quick commerce has quickly overtaken traditional e-commerce and is no longer limited to urgent or last-minute purchases. It now delivers a wide range of products within minutes. This growth has been driven by “dark stores” — small, local fulfilment hubs that allow orders to be picked, packed and dispatched in real time. Supported by advanced logistics and technology systems, dark stores have transformed how inventory is managed, how fast deliveries are made, and how consumers interact with platforms.

The technology behind quick commerce is just as important. Integrated systems connect sellers, warehouses, delivery partners and consumers, providing real-time visibility of orders and inventory. This close coordination brings together what were once multiple stages of traditional e-commerce into a single, real-time operating model.

However, this level of operational integration also blurs the boundary between acting as a neutral platform and exercising control, raising concerns under India’s FDI rules. To meet tight delivery timelines, platforms often need close visibility over inventory at dark stores. Similarly, tools such as dynamic pricing and instant discounts, even when algorithm-driven, may be viewed as indirectly influencing prices.

From a regulatory perspective, Indian-owned and controlled companies (IOCCs) have greater flexibility, as FDI restrictions on inventory-based e-commerce do not apply to them. They can therefore own inventory and exercise broader operational control. By contrast, foreign-owned or controlled companies (FOCCs) are generally limited to a marketplace role, acting only as intermediaries without owning inventory or influencing pricing and key operational decisions.

FOCC platforms often expand into related services such as logistics, warehousing, payments, advertising and promotions. While these functions may be housed in separate entities, they are closely linked in practice and must be carefully structured to remain compliant with FDI regulations.

Another commonly used route is the “manufacturing exemption” under the FDI policy. This allows companies that manufacture goods in India, including through contract manufacturers, to sell those products online without being subject to retail e-commerce restrictions. Many quick commerce players use this exemption for private-label or in-house brands to expand their product range and improve margins.

Overall, quick commerce structures now fall along a spectrum. At one end are IOCC-led models that are not subject to FDI restrictions. At the other are pure marketplace platforms with strict compliance controls. In between are hybrid models that split technology, logistics and wholesale functions across different entities. The key challenge is designing these structures in a way that maintains speed and scale while staying within regulatory limits.

Challenges

Although quick commerce platforms have carefully structured their operations to align with India’s foreign investment and compliance regime, these safeguards have not fully shielded the sector from growing regulatory attention. As the industry expands, it has increasingly come under the lens of both policymakers and enforcement authorities.

Issues such as deep discounting, preferential product placement and the use of dark patterns in digital interfaces have already prompted regulatory scrutiny. There are also concerns around predatory pricing, particularly where sustained losses are backed by well-capitalised investors, leading to calls for closer oversight of pricing practices and market behaviour.

Regulatory supervision is also becoming more hands-on at the operational level. Authorities have conducted physical inspections of dark stores to assess compliance with food safety standards. At the same time, the close interaction between inventory visibility, pricing tools and algorithm-driven product rankings has created interpretational challenges under the FDI framework.

In addition, the high volume of real-time data and transactions, along with dependence on dark stores and third-party delivery partners, has made consistent compliance with e-commerce and consumer protection rules more complex. The growing use of algorithms and automated systems to shape consumer experience further raises sensitivities around data usage and protection.

For industry participants, compliance has therefore evolved beyond following a single set of rules into managing a dense and overlapping regulatory landscape. This can be particularly challenging for foreign-funded entities, given the layered conditions and grey areas under FDI policy. As a result, many operators view the Indian-owned and controlled company (IOCC) model as a more workable option, offering greater operational flexibility while reducing exposure to FOCC-specific restrictions.

That said, even IOCC structures are not free from regulatory balancing acts. The need to align business agility with compliance remains constant, highlighting that no single model can fully address the rapidly evolving dynamics of India’s quick commerce sector.

Looking Ahead

Over the past decade, India’s FDI regime for e-commerce has developed alongside the digital economy, aiming to attract foreign investment while protecting local businesses. This framework has also created the conditions for the growth of quick commerce.

As quick commerce expands rapidly, it has drawn increasing attention from both investors and regulators. With major players looking to access Indian capital markets, regulators are once again examining issues such as market control, consumer protection and the influence of foreign capital. Concerns raised by trade bodies around competition and regulatory compliance are likely to intensify this scrutiny.

Even so, India remains well placed to support the growth of quick commerce while refining its policies to protect small retailers.

The Rise of Quick Commerce in India: Business Innovation Meets Regulatory Reality