The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second largest E-commerce market in the world by 2034. India e-commerce sector is expected to reach US$ 111.40 billion by 2025 from US$ 46.20 billion in 2020, growing at a 19.24% CAGR, with grocery and fashion/apparel likely to be the key drivers of incremental growth. According to Forrester Research, Indian e-commerce sales rose by ~7-8% in 2020. The Indian online grocery market is estimated to reach US$ 18.2 billion in 2024 from US $1.9 billion in 2019, expanding at a CAGR of 57%.

According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025.

According to NASSCOM, despite COVID-19 challenges/disruptions, India's e-commerce market continues to grow at 5%, with expected sales of US$ 56.6 billion in 2021.

The Indian e-commerce sector is ranked 9th in cross-border growth in the world, according to Payoneer report. Indian e-commerce is projected to increase from 4% of the total food and grocery, apparel and consumer electronics retail trade in 2020 to 8% by 2025. India's e-commerce orders volume increased by 36% in the last quarter of 2020, with the personal care, beauty and wellness (PCB&W) segment being the largest beneficiary. E-commerce sales in India were estimated to increase by only 7-8% in 2020, compared with 20% in China and the US. The e-commerce market is expected to touch the US$ 84-billion mark in 2021 on the back of healthy growth in the Indian organised retail sector.

As most Indians have started shopping online rather than stepping outside their houses, the Indian e-commerce sector witnessed an increase. India's e-commerce festive sale season from October 15 to November 15 in 2020 recorded Rs. 58,000 crore (US$ 8.3 billion) worth of gross sales for brands and sellers, up 65% from Rs. 35,000 crore (US$ 5 billion) last year.

According to Bain & Company report, India’s social commerce gross merchandise value (GMV) stood at ~US$ 2 billion in 2020. By 2025, it is expected to reach US$ 20 billion, with a potentially monumental jump to US$ 70 billion by 2030, owing to high mobile usage. India's e-commerce order volume increased by 36% in the last quarter of 2020, with the personal care, beauty & wellness (PCB&W) segment being the largest beneficiary. Driven by beauty and personal care (BPC), India's live commerce market is expected to reach a gross merchandise value (GMV) of US$ 4-5 billion by 2025.

For the 2021 festive season, Indian e-commerce platforms are anticipated to generate over US$ 9 billion gross GMV (Gross Merchandise Value), a 23% increase from last year’s US$ 7.4 billion.

Huge investments from global players—such as Facebook, which is investing in Reliance Jio—are being recorded in the e-commerce market. Google also reported its first investment worth US$ 4.5 billion in Jio Platforms. This deal was followed by the purchase of Future Group by Reliance Retail, expanding the presence of the Ambani Group in the e-commerce space.

Much of the growth in the industry has been triggered by increasing internet and smartphone penetration. As of July 2021, the number of internet connections in India significantly increased to 784.59 million, driven by the ‘Digital India’ programme. Out of the total internet connections, ~61% connections were in urban areas, of which 97% connections were wireless. Online penetration of retail is expected to reach 10.7% by 2024 compared with 4.7% in 2019. Moreover, online shoppers in India are expected to reach 220 million by 2025. According to a report published by IAMAI and Kantar Research, India internet users are expected to reach 900 million by 2025 from ~622 million internet users in 2020, increasing at a CAGR of 45% until 2025.

Smartphone shipments in India increased by ~23% YoY to reach 38 million units in the first quarter of 2021, driven by new product launches and delayed demand from 2020. Xiaomi led the Indian smartphone market with 26% shipping, followed by Samsung (20%).

The Government of India's policies and regulatory frameworks such as 100% Foreign Direct Investment (FDI) in B2B E-commerce and 100% FDI under automatic route under the marketplace model of B2C E-commerce are expected to further propel growth in the sector. As per the new FDI policy, online entities through foreign investment cannot offer the products which are sold by retailers in which they hold equity stake.

As of September 27, 2021, the Government e-Marketplace (GeM) portal served 7.65 million orders worth Rs. 140,648 crore (US$ 19.09 billion) to 54,699 buyers from 2.8 million registered sellers and service providers.

Through its Digital India campaign, the Government of India is aiming to create a trillion-dollar online economy by 2025. It has formed a new steering committee that will look after the development of a government-based e-commerce platform. The new committee, set up by the Commerce Ministry, will provide oversight on the policy for the Open Network for Digital Commerce (ONDC), which is an e-commerce platform that the government is backing for the development. The ONDC will serve as the infrastructure for setting up the final storefront, which will be similar to Flipkart and Amazon.