Scholars most commonly view the modern consumer movement in India from two perspectives – that of consumer activism and that of business self-regulation. There is tradition in India which says that consideration for consumer rights began in the Vedic Period, and in these narratives, laws encourage merchants to practice honesty and integrity in business. Most discussion about India’s consumer activism starts with a description of the Indian independence movement. At this time Gandhi and other leaders protested taxation of basic consumer products, such as during the Salt March, and encouraged people to make their own goods at home, as with the Khādī movement to promote spinning thread and weaving one’s own textiles. These actions were to raise awareness that consumer purchase decisions fund the source of India’s political control.
Gandhi promoted the idea that businesses have a trustee role in being responsible to the customers, workers, shareholders, and their community. In particular, Gandhi said that “A customer is the most important visitor on our premises. He is not dependent upon us. We are dependent upon him. He is not an interruption in our work – he is the purpose of it. We are not doing him a favor by serving him. He is doing us a favor by giving us the opportunity to serve him”. United States consumer advocate Ralph Nader called Gandhi “the greatest consumer advocate the world has seen” for advancing the concept that commercial enterprise should serve the consumer and that the consumer should expect to be served by business. Vinoba Bhave and Jayaprakash Narayan, two great proponents of Gandhi’s philosophy, and V. V. Giri and Lal Bahadur Shastri, contemporary Indian president and prime minister, similarly expected the business community to regulate itself as an expression of responsibility to contribute to society. These ideas were developed by some business leaders. In July 1966 in Bombay some people founded the Fair Trade Practice Association, which was later renamed the Council for Fair Business Practice. This is now seen as a sincere effort toward promoting business self-regulation, despite consumer activists’ criticism that self-regulation would not provide sufficient protection to consumers.
From the perspective of consumer activism, the Planning Commission backed the foundation of the Indian Association of Consumers in 1956 in Delhi to be a national base for consumer interests. For various reasons, it was not effective in achieving its goals. Other organizations were established in the 1960 in various places in India but none were effective in achieving community organization. Leading on past failures, in Bombay in 1966 nine female homemakers founded the Consumer Guidance Society of India (CGSI) which remains one of India’s most important consumer organizations. The most powerful consumer organization in India is the Consumer Education and Research Center (CERC), founded in 1978 in Ahmedabad as part of the “social action litigation movement“. At that time in society, courts started recognizing social workers and public interest groups as consultants on behalf of individuals or classes of people whose rights had been violated but who could not easily speak for themselves. Since its founding CERC has become among the most successful consumer organizations of the developing world in terms of its achievements of litigating on behalf of consumers. The Consumer Protection Act of 1986 was mostly a result of intensive lobbying by CERC and CGSI.
In 1991 the Economic liberalisation in India radically changed the Indian marketplace by opening India to foreign trade and foreign investment.