“>At a time when India’s consumer protection framework is undergoing structural transformation—through stronger regulatory enforcement, digital justice delivery, and the integration of artificial intelligence into governance—Nidhi Khare, Secretary, Department of Consumer Affairs, Government of India, is steering a decisive shift towards intelligence-led, technology-enabled consumer regulation. From the Delhi High Court’s affirmation of the Central Consumer Protection Authority’s guidelines on service charges to the expansion of the National Consumer Helpline as a real-time enforcement tool, the Department is recalibrating the balance between market freedom and consumer rights.
In this conversation with Anoop Verma, she reflects on the evolving jurisprudence under the Consumer Protection Act, 2019, the systemic enforcement against unfair trade practices, the digital consolidation of consumer commissions through platforms such as e-Jagriti, and the Ministry’s strategic embrace of AI as a governance instrument. The interview situates consumer protection not merely as grievance redressal, but as anticipatory regulation in a digitising marketplace.
Edited excerpts:
The Delhi High Court has upheld the CCPA’s guidelines on service charges. From the Ministry’s perspective, how does this judgment strengthen the legal architecture of consumer protection in India?
The Delhi High Court’s judgment dated 28 March 2025, upholding the Guidelines to Prevent Unfair Trade Practices and Protection of Consumer Interest with Regard to Levy of Service Charge in Hotels and Restaurants issued by the Central Consumer Protection Authority on 4 July 2022, significantly strengthens the statutory framework of consumer protection under the Consumer Protection Act, 2019. The Court has clarified that guidelines issued under Section 18 of the Act are not merely advisory; they are enforceable regulatory instruments designed to protect consumers as a class.The Court categorically held that the mandatory collection of service charges by restaurants is contrary to law and directed all establishments to comply with the CCPA’s guidelines. It further affirmed that the Authority is fully empowered to enforce its directions. From the Ministry’s standpoint, this judgment consolidates the principle that consumer protection is not confined to post-facto grievance redressal. It also encompasses proactive market correction to prevent unfair trade practices before they become entrenched.
The investigations were triggered through complaints received on the National Consumer Helpline. In several cases, including Café Blue Bottle in Patna and China Gate Restaurant Private Limited (Bora Bora) in Mumbai, invoices revealed automatic addition of a 10 percent service charge. A detailed inquiry established that such practices amount to an unfair trade practice under Section 2(47) of the Act.
Section 2(47) of the Consumer Protection Act defines unfair trade practices. How does the Ministry interpret the automatic levy of service charge within this definition?
Section 2(47) defines an unfair trade practice as one that adopts unfair or deceptive methods or imposes unjustified costs on consumers. The automatic and mandatory levy of a service charge, without explicit, informed, and prior consent, clearly falls within this definition. When a charge is presented as obligatory or embedded by default in a bill, it imposes an unjustified cost and interferes with the consumer’s freedom of choice.
The Ministry’s position is unequivocal. Service charge, if levied, must remain voluntary. No hotel or restaurant may add it automatically or by default. It cannot be collected under any alternative nomenclature. Consumers must be clearly informed that payment is optional, and no establishment may deny service or restrict entry on the ground that a consumer refuses to pay it. Further, a service charge cannot be added to the bill and then subjected to GST. Any practice that undermines transparency in pricing distorts transactional fairness and therefore qualifies as an unfair trade practice.
The recent action covers 31 restaurants across different cities. Is this a corrective exercise or the beginning of sustained, sector-wide enforcement?
The action against 31 restaurants across jurisdictions is not an isolated corrective measure. It forms part of a sustained, evidence-based enforcement strategy. At present, 31 notices have been issued by the CCPA to restaurants. The objective is not punitive expansion but compliance standardisation. Where non-compliance persists, enforcement will continue in a calibrated and proportionate manner. Our approach is systemic. We identify patterns across establishments and ensure uniform adherence to consumer protection norms. The goal is to establish clear market discipline so that fair practices become the default across the sector.
What role did billing software and automated systems play in perpetuating this practice, and how is the Ministry addressing technology-enabled non-compliance?
In many instances, service charges were embedded as default entries in billing software. This meant that the charge was automatically included without human intervention. Such technology-enabled defaults create structural non-compliance by design, and that is a matter of concern. The Ministry has taken cognisance of this dimension. Automated systems cannot override statutory rights. Establishments are required to reconfigure their billing software to ensure that any service charge remains optional and can be removed without friction. Going forward, technological audits and compliance advisories will increasingly focus on system-level practices and algorithmic defaults that may indirectly perpetuate unfair trade practices.
Penalties imposed range up to ₹50,000. Are current penalties adequate to deter large restaurant chains, or is there a case for stronger financial disincentives?
Under the Consumer Protection Act, 2019, penalties are designed to ensure corrective compliance rather than revenue extraction. While ₹50,000 may appear modest for large chains, enforcement does not operate in isolation. Reputational impact, regulatory scrutiny, and the possibility of escalated action in cases of repeated violations serve as significant deterrents. That said, markets are evolving rapidly. The Ministry remains open to reviewing the adequacy of penalties based on enforcement experience, particularly where systemic or wilful non-compliance is observed. Regulatory frameworks must remain responsive to changing market realities.
This action was triggered by complaints received on the National Consumer Helpline. How has the Helpline evolved as an enforcement tool?
The National Consumer Helpline has evolved beyond being a grievance redressal interface. It now functions as a real-time market intelligence platform. Data analytics derived from complaint clusters allow us to detect sectoral patterns early. In the present case, recurring complaints across cities signalled a systemic issue warranting regulatory intervention by the CCPA. The Helpline today operates as an enforcement trigger, a policy feedback mechanism, and a barometer of consumer sentiment. This intelligence-led approach strengthens preventive regulation and allows us to move from reactive to anticipatory enforcement.
What is your message to restaurants that argue service charges are necessary for staff welfare and operational sustainability?
We fully recognise the importance of fair wages and staff welfare. However, consumer law principles require transparency and voluntariness in pricing. Operational sustainability cannot be ensured through practices that compromise informed consent. If establishments wish to incorporate service costs into their pricing structures, they are free to revise menu prices transparently. What is impermissible is the automatic imposition of a charge presented as mandatory. Consumer protection and business viability are not mutually exclusive; transparency harmonises both interests.
What are the Department’s overarching priorities for consumer protection in 2026, particularly in a rapidly digitising marketplace?
Our priorities for 2026 reflect the realities of a digital marketplace. We are strengthening oversight of e-commerce platforms and monitoring dark patterns. We are enhancing technology-driven enforcement mechanisms and deepening inter-agency coordination to combat financial and digital fraud. Consumer awareness initiatives are being expanded to address emerging sectors such as fintech and online services. A central focus is the use of data analytics for anticipatory regulation. We are transitioning from a complaint-driven model to intelligence-led preventive consumer protection.
National Consumer Day 2025 emphasised “Efficient and Speedy Disposal through Digital Justice.” How is this principle being operationalised?
National Consumer Day 2025 underscored the shift towards digital justice delivery mechanisms. We are accelerating the digitalisation of consumer commissions through e-filing systems, virtual hearings, integrated dashboards, and real-time case tracking. These measures are aimed at reducing pendency, enhancing transparency, and improving accessibility, particularly for consumers in remote areas. Institutional strengthening under the Consumer Protection Act, 2019 is being aligned with technological modernisation to ensure time-bound adjudication and improved service delivery.
‘e-Jagriti’ has been described as transformative. What have been its key achievements and what lies ahead?
The e-Jagriti platform has integrated consumer commissions nationwide into a unified digital ecosystem. It enables e-filing, case tracking, cause list generation, and digital issuance of orders. This has standardised case lifecycle management, improved transparency, and reduced procedural delays. Future enhancements include AI-assisted cause list management, predictive analytics for monitoring pendency, and multilingual accessibility to broaden participation. Our objective is to build a seamless digital infrastructure that enhances both efficiency and inclusivity.
With the expansion of the National Consumer Helpline, how have participation and satisfaction metrics evolved?
With multilingual support, sector-specific escalation mechanisms, and integration with GST-related grievances, the Helpline has witnessed significant expansion in outreach and resolution rates. Participation has increased beyond metropolitan centres into tier-II and tier-III cities, reflecting improved accessibility and awareness. Satisfaction metrics indicate better first-level resolution through convergence with companies under the convergence programme. The Helpline now represents a participatory governance model in which consumer voices directly inform regulatory priorities and enforcement strategy.
Coming to the recently concluded India AI Impact Summit, you participated in the Summit along with your officers. What were you seeking to achieve there, and what was your overall experience?
I deliberately took all my senior officers to the AI Summit so that, collectively, we could develop a clear and practical understanding of what artificial intelligence tools are, and how they are being deployed across different sectors of governance. It was important that we did not approach AI as an abstract technological concept, but as a functional governance tool.
We came across extremely exciting products as well as real-world use cases. AI is already being applied in agriculture, in health systems, in financial transactions, and in various public service delivery platforms. For us, it was critical to recognise both the transformative potential of AI and the apprehensions that surround it. Many people are understandably cautious about AI. My view is that instead of being fearful, we should strive to understand its capabilities—particularly its potential to reduce drudgery, enhance efficiency, improve accountability, and ensure faster redressal of grievances.
From the perspective of the Department of Consumer Affairs, we immediately saw several areas where AI can be meaningfully integrated. For instance, it can assist in faster testing of samples, help enhance product quality standards, and ensure accurate measurement and quantity verification. Most importantly, AI can be used to provide quicker and more cost-effective redressal of consumer complaints. Overall, the experience was deeply inspiring and reinforced our belief that AI must become a core component of future-ready governance.
AI tools are already being used in several departmental initiatives. How do you see this evolving further within the Ministry?
AI is already being used in certain initiatives within the Ministry. However, our objective now is to mainstream its application in a manner that tangibly benefits consumers. One of our key priorities is to make the grievance-filing process simpler and more accessible. We cannot expect every citizen to be fully conversant with the provisions of the Consumer Protection Act or the technicalities of complaint filing. With AI-enabled systems, we can interpret a consumer’s grievance in plain language and assist in drafting and filing the complaint in a structured manner. This will significantly ease the process for ordinary citizens.
Another important area is the creation of a structured repository—a legacy database—of orders passed by various consumer commissions. By leveraging AI, we can organise and analyse past judgments in a way that helps consumers better understand precedents. This would prevent unrealistic expectations that are sometimes created by intermediaries and allow citizens to make informed decisions regarding compensation claims or relief sought. When consumers have clarity about comparable cases in other jurisdictions, it contributes to more rational demands and, consequently, faster disposal of complaints.
In essence, AI offers us the ability to combine efficiency with transparency. If implemented thoughtfully, it can reduce pendency, enhance predictability in outcomes, and strengthen trust in the consumer protection ecosystem. For us, AI is not merely a technological upgrade; it is an enabler of citizen-centric governance.
