Legal Issues Affecting Travel E-Commerce Companies in India

What Boards, Founders, and General Counsel Must Watch in 2026

Introduction

India’s travel e-commerce sector covering online travel agencies (OTAs), meta-search platforms, corporate travel tools, experience marketplaces, and mobility aggregators, has seen rapid growth alongside increasing regulatory, consumer, and enforcement scrutiny. As platforms scale, legal exposure now extends far beyond routine consumer complaints, cutting across data protection, competition law, payments regulation, taxation, advertising standards, and director liability.

This article highlights the key legal risks shaping travel e-commerce companies in India and outlines practical mitigation strategies from a board-level perspective.

Consumer Protection & Refund Risk

Travel remains one of the most litigated e-commerce categories in India.

A. Key risk areas

• Hidden or drip pricing (convenience fees, service charges disclosed late)
• Ambiguous “free cancellation” or “refundable” claims
• Delayed or partial refunds during disruptions
• One-sided limitation of liability clauses

B. Regulatory exposure

• Consumer Protection Act, 2019
• CCPA guidelines on misleading advertisements and dark patterns

C. Board-Level Focus

Refund handling is no longer an operational issue but a regulatory and reputational risk with potential penalties and class-style complaints.

Intermediary vs Principal Liability

Most travel e-commerce companies position themselves as intermediaries, yet consumer law often looks at substance over form.

A. Key challenges

• Platform marketing creates consumer perception of the platform as the “seller”
• Supplier failures (hotel overbooking, flight cancellations) flow back to the platform
• Supplier contracts often fail to mirror consumer-facing promises

B. Risk Outcome

Platforms may be held jointly liable despite “marketplace only” disclaimers.

Data Protection & Cybersecurity (DPDP Act)

Travel e-commerce companies process some of the most sensitive consumer datasets, including passports, visas, IDs, and travel history.

A. Key risks

• Excessive data collection beyond necessity
• Cross-border data sharing with airlines, hotels, insurers, and visa agents
• Weak vendor controls and breach response readiness

B. Board & Management Exposure

The Digital Personal Data Protection Act places direct accountability on senior management, not just IT teams.

Payments, Refund Flows & RBI Scrutiny

Handling customer funds creates layered compliance issues.

A. Key Risk areas

• Payment aggregator alignment and refund timelines
• Chargebacks and fraud losses
• Travel credits, vouchers, and stored-value products resembling wallets
• Foreign exchange and cross-border payment compliance

B. Regulatory Consequence

Poorly structured payment flows can trigger RBI and banking partner scrutiny.

GST, TCS & Tax Structuring

Travel transactions raise persistent tax complexity.

A. Common disputes

• Whether the platform is a principal or agent for GST
• Taxability of convenience and service fees
• TCS obligations on overseas tour packages
• Input tax credit eligibility

B. Audit Risk

Tax positions misaligned with contracts and invoices are increasingly challenged in audits.

Advertising, Discounts & Influencer Compliance

Aggressive growth marketing attracts enforcement attention.

A. Key risk triggers

• “Lowest price guaranteed” claims without substantiation
• False urgency (only 1 seat left)
• Paid influencer promotions without disclosure
• Manipulated ratings or reviews

B. Enforcement Impact

Non-compliant campaigns can lead to penalties, takedowns, and brand erosion.

Competition Law & Platform Conduct

As platforms gain market power, conduct is closely watched.

A. Competition risks

• Rate parity / MFN clauses with hotels
• Self-preferencing preferred inventory
• Predatory discounting funded by the platform
• Use of supplier data to compete against suppliers

B. Governance Implication

Competition exposure is now a board-level governance issue, not merely a commercial one.

Intellectual Property & Content Risk

Travel e-commerce companies are content-heavy businesses.

A. Common issues

• Unlicensed hotel images and descriptions
• Trademark use in keyword advertising
• User-generated content ownership and takedowns

B. Transactional Sensitivity

IP disputes often arise during fundraising, acquisitions, or cross-border expansion.

Sector-Specific Travel Regulations

Depending on the product stack, platforms may face:

• Airline agency and fare disclosure obligations
• State tourism and local municipal regulations for hotels and homestays
• Transport and aggregator compliance for ground mobility
• Safety and liability norms for experiences and adventure travel

A one-size-fits-all compliance approach does not work in travel.

Director & Officer Exposure

Increasingly, regulators and consumer authorities are:

• Naming directors in complaints
• Seeking personal undertakings
• Linking compliance failures to governance lapses

Well-documented compliance programs are now a personal risk shield for leadership.

Board-Ready Compliance Checklist

• Transparent pricing and cancellation architecture
• Back-to-back supplier contracts and indemnities
• DPDP-aligned privacy, consent, and vendor controls
• Clean payment and refund flow documentation
• GST/TCS position memos aligned with invoicing
• Advertising substantiation and influencer policies
• Competition-law review of parity and discounting
• IP licensing and takedown mechanisms
• Product-wise regulatory mapping
• Crisis and disruption response playbooks

Conclusion

For travel e-commerce companies in India, legal compliance is no longer a backend function but a core business enabler. Platforms that embed regulatory discipline into product design, contracts, and governance are better positioned to scale, raise capital, and withstand regulatory scrutiny.