India, March 12 -- India's small businesses rely on social media for affordable growth, but assumption-based regulations risk raising advertising costs and stifling innovation. Policymakers must adopt data-driven approaches to ensure competition laws support micro, small and medium enterprises (MSMEs) rather than unintentionally harming them through broad and sweeping restrictions.

In a recent study, my co-authors and I surveyed nearly 1,400 non-tech startups across India to understand their use of social media for business growth. The findings were clear: The smaller the firm, the more crucial social media advertising becomes. This can also be inferred from analysing the pitches of the ventures showcased on Shark Tank India, where digit...