Karnataka retailers warn against growing Illicit trade, market distortion in India’s e-com ecosystem

The race for cheaper prices is opening dangerous entry points for banned, illegal and counterfeit products to penetrate the market at an unprecedented scale. | Photo Credit: File photo The Karnataka State Retail Traders Welfare & Development Association organised a seminar on “Confronting Illicit Trade in Modern Markets” here on Tuesday where retailers, trader associations, and policymakers came together to deliberate on two rapidly growing threats impacting India’s retail ecosystem: the alarming rise of illicit trade and the increasing prevalence of unfair market practices.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 were creating severe imbalances for small retailers and traditional businesses.The seminar highlighted that both illicit trade and unfair market practices were adversely affecting genuine businesses, government revenues, consumer trust and the livelihoods of lakhs of small traders across Karnataka.Addressing the gathering, B.N. Murali Krishna, president of the association, 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 exposed consumers to substandard and unsafe goods but also undermine the credibility of legitimate businesses that operate within the law, he said, adding, “Our association remains 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.The participants 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.The Karnataka State Retail Traders Welfare & Development Association has over two lakh micro, small, and medium retailers from Karnataka as members. It also represents the livelihoods of over 5 lakh poorest of the poor retailers and their families.Vijayananda Kashappanavar, Minister for Small Scale Industries & Public Enterprises, Rizwan Arshad, Minister for Food, Civil Supplies and Consumer Affairs, B.K. Shivaram, Retd ACP and C. Govindappa, Joint Controller of Legal Metrology attended the meeting. Published - September 09, 2026 06:48 pm IST