At present, the disturbances like the voltage fluctuations, resulting from the grid's complexities and unbalanced load conditions, create severe power quality concerns like total harmonic distortion (THD) and voltage unbalance factor (VUF) of the grid voltage. Though the custom power devices such as distribution-static compensators (D-STATCOMs) improve these power quality concerns, however, the accompanying controller plays the substantial role. Therefore, this paper proposes a fractional-order sliding mode control (FOSMC) for a D-STATCOM to compensate the low power distribution system by injecting/absorbing a specific extent of the reactive power under disturbances. FOSMC is a non-linear robust control in which the sliding surface is designed by using the Riemann-Liouville (RL) function and the chattering phenomenon is minimized by using the exponential reaching law. The stability of FOSMC is evidenced by employing the Lyapunov stability criteria. Moreover, the performance of the proposed FOSMC is further accessed while doing its parametric variations. The complete system is demonstrated with a model of 400V, 180kVA radial distributor along with D-STATCOM under two test scenarios in MATLAB/Simulink environment. The results of the proposed controller are compared with the fixed frequency sliding mode control (FFSMC) and conventional proportional-integral (PI) control. The results validate the superiority of the proposed controller in terms of rapid tracking, fast convergence, and overall damping with very low THD and VUF.