Vietnam is about to run a regulatory experiment that India should watch closely. On July 1, 2026, Law No. 122/2025/QH15 on Electronic Commerce — ratified by the National Assembly on December 10, 2025 — takes effect, and with it a four-tier taxonomy of online platforms that includes a distinct legal category for social networks with e-commerce functions. Rather than ordering TikTok to amputate its shopping arm, Hanoi has chosen to define what a social-commerce platform is and regulate it as such. For Indian policymakers eyeing a booming, largely ungoverned live-shopping market, this is the most relevant policy event in the region this year.
What Vietnam actually did
The new law sorts platforms into four buckets (Article 4): direct-selling platforms, intermediary marketplaces, social networks with e-commerce functions, and integrated platforms bundling several services. A platform offering even one of online communication, online ordering, or livestream sales falls inside the perimeter and inherits the same disclosure and transparency duties as a conventional marketplace.
The headline obligations land hardest on livestreaming. Under Articles 22 and 24, livestream presenters must electronically verify their identity before broadcasting, sellers must hand platforms the business-condition documentation needed for that verification, and platforms must retain livestream data for at least one year to support regulatory inspection. That is a steep jump for TikTok and Shopee, which today keep livestream sessions for roughly a month. The law also imposes joint liability for consumer harm and requires foreign operators reaching certain thresholds to establish a local entity or representative.
This is heavy compliance. But notice what it is not: it is not a structural separation order. TikTok in Vietnam keeps its feed and its shop in one app.
The contrast with Indonesia
The steelman for the harder approach is real. When Indonesia's Ministry of Trade issued Regulation No. 31 of 2023 in late September 2023, its concern was concrete: a single platform controlling both the discovery algorithm and the checkout could weaponise behavioural data against millions of small merchants and predatorily undercut local sellers. Within days, TikTok Shop — then serving roughly six million Indonesian merchants — was ordered offline on October 4, 2023, and could only return after registering a separate legal entity (its later tie-up with Tokopedia). Drawing a bright line between "social media" and "commerce" is administratively clean and politically legible.
The cost is borne by exactly the people the rule claims to protect. Forcing an app to split means the small seller who built an audience through short videos must now drag that audience to a separate storefront, breaking the discovery-to-purchase loop that made social commerce work. Innovation is penalised not for any proven harm but for the architecture of integration itself. Vietnam's wager is that you can address the underlying mischief — fraud, untraceable sellers, fake reviews — by regulating conduct and identity, without dictating corporate structure. That is the more proportionate instinct, and the one consistent with a pro-innovation, evidence-based posture.
Why this lands on India's desk
India is the conspicuous outlier. It removed TikTok from the equation entirely on June 29, 2020, when the Ministry of Electronics and Information Technology blocked 59 Chinese apps under Section 69A of the IT Act, citing sovereignty and data-security grounds. That ban was a national-security action, not a competition or consumer-protection measure — and it left the policy questions Vietnam and Indonesia are now answering completely unaddressed at home.
Meanwhile, the activity migrated, it did not vanish. India's social-commerce market is projected at roughly US$8.4 billion in 2025, with Meesho, Instagram, and YouTube running the live-selling playbook TikTok pioneered elsewhere. The governing instrument remains the Consumer Protection (E-Commerce) Rules, 2020, framed under the Consumer Protection Act, 2019. Those rules impose seller-verification duties (Rule 6) and "fall-back liability" on marketplaces (Rule 5) — but they were written for catalogue-style marketplaces, not for a creator livestreaming sales to a swipe-up audience with no traceable business registration. The accountability gap Vietnam is closing with livestream identity verification and data retention is, in India, simply open.
The proportionate lesson
The instinct in some quarters of Delhi will be to reach for the blunt instrument again — a ban, or a hard structural separation modelled on Indonesia. India should resist both. A ban forecloses a genuine economic opportunity for small sellers and creators; structural separation punishes an architecture rather than a harm. The better course is the one Vietnam is testing: extend India's existing consumer-protection framework to cover live commerce specifically, with targeted, narrowly tailored obligations.
That means three things. First, seller identity and business-condition verification for anyone selling via livestream, so consumers can trace and sue a real entity — the single most effective fraud deterrent, and one that does not touch platform structure. Second, a proportionate data-retention window for live sessions, calibrated to investigation needs rather than the open-ended surveillance a one-year floor risks becoming. Third, clear platform liability that attaches to the failure to perform these duties, not to the mere fact of integrating feed and checkout.
Vietnam's law is not perfect. The one-year retention mandate and local-presence requirements carry real privacy and market-access costs that India should not import wholesale. But the underlying design choice — classify and regulate conduct, rather than dismantle and ban — is the right one. India already has the chassis in the 2020 Rules. What it lacks is the live-commerce-specific update that Vietnam, for all its flaws, has just shown can be written without forcing anyone to break their app in half.