E-commerce Industry in India

Indian e-commerce is expected to grow at a compound annual growth rate (CAGR) of 27% to reach US$ 163 billion by 2026.

Advantage India

Growing
Demand

* The Indian Beauty and Personal Care (BPC) market is experiencing rapid growth, projected to reach a GMV of Rs. 2,60,610 crore (US$ 30 billion) by CY27. This represents 5% of the global beauty industry. The market is expanding at an annual growth rate of around 10%, making it the fastest-growing BPC market among major economies.

* India’s e-retail sector is poised for strong long-term growth, with GMV projected to rise over 18% annually to reach Rs. 14.5 lakh crore (US$ 170 billion) by 2030.

*India's Business-to-Business (B2B) online marketplace would be a US$ 200 billion opportunity by 2030.

Attractive
Opportunities

* In FY2025, India's e-commerce sector achieved a GMV of approximately Rs. 1.19 lakh crore (US$ 14 billion), reflecting a 12% year-on-year growth.

* In FY23, social commerce significantly transformed traditional retail and e-commerce in India, with projections indicating a growth rate of 31% CAGR, reaching US$ 37 billion by FY25.

* The Indian e-commerce market grew from Rs.1,257,879 crore (US$ 147.3 billion) in FY24 & is projected to grow to Rs. 3,106,191 crore (US$363.3 billion) by 2030.

Policy
support

* 100% FDI is allowed in B2B e-commerce & marketplace model of E-commerce.

* Government initiatives like the National Logistics Policy and Digital India are boosting e-commerce by improving connectivity, streamlining logistics, and expanding digital access. These efforts aim to support the creation of a trillion-dollar online economy by 2025

*The Budget backs MSMEs with increased investment limits, better credit support, and a Rs. 10,000 crore (US$ 1.17 billion) startup fund. It also promotes electronics manufacturing and Global Capability Centre in Tier 2 cities to strengthen e-commerce supply chains.

Increasing
Investments

* The indigenous e-commerce giant Flipkart is poised to raise US$ 1 billion in a new funding round, with its parent company Walmart anticipated to contribute US$ 600 million.

* Google LLC is investing US$ 350 million in Flipkart as part of a nearly US$ 1 billion funding round led by Walmart Inc., Flipkart's majority stakeholder, with the investment aimed at expanding Flipkart's business and modernizing its digital infrastructure to serve customers across India, and the two companies also plan to increase Flipkart's use of Google's cloud platform.

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Last updated: Aug, 2025

E-Commerce Industry Report

May, 2025

Introduction

In recent years India has experienced a boom in internet and smartphone penetration. This has helped India’s digital sector, and it is expected to reach US$ 1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of India’s e-commerce sector. India’s e-commerce sector has transformed the way business is done in India and has opened various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to-business (C2B). Major segments such as D2C and B2B have experienced immense growth in recent years.

India’s e-commerce industry, valued at Rs. 10,82,875 crore (US$ 125 billion) in FY24, is projected to grow to Rs. 29,88,735 crore (US$ 345 billion) by FY30, reflecting a compound annual growth rate (CAGR) of 15%.

In 2024-25, e-commerce emerged as a key driver of start-up investments, drawing Rs. 26,527 crore (US$ 3.1 billion) across 79 deals — accounting for 31% of total start-up funding. This marked a sharp 128% jump from 2023’s Rs. 11,980 crore (US$ 1.4 billion) across 59 deals. The hyperlocal and B2C segments led the charge, with Zepto (Kirana Kart Technologies) standing out by raising Rs. 11,980 crore (US$1.4 billion) alone — contributing 44% of all e-commerce-related PE/VC investments.

According to a joint report by real estate consulting firm ANAROCK and retail news platform ETRetail, the sector is further expected to reach Rs. 47,64,650 crore (US$ 550 billion) by FY35, driven by increasing digital adoption and evolving consumer behaviour.

India’s e-retail market has reached around Rs. 5,13,420 (US$ 60 billion) in GMV, making it the world’s second largest by online shopper base. Trend-led fashion is set to grow nearly 4x to Rs. 68,456-85,570 crore (US$ 8–10 billion) by 2028, with over 50% of sales expected from online platforms.

The Indian Beauty and Personal Care (BPC) market is experiencing rapid growth, projected to reach a GMV of Rs. 2,60,610 crore (US$ 30 billion) by CY27. This represents 5% of the global beauty industry. The market is expanding at an annual growth rate of around 10%, making it the fastest-growing BPC market among major economies.

India’s subscription e-commerce market, valued at Rs. 88,479 crore (US$ 10.34 billion), in 2024, is projected to reach Rs. 3.2 lakh crore (US$ 374.24 billion), by 2033, growing at a CAGR of 45.13% during 2025–2033.

Market Size

According to a recent report by EY India, generative artificial intelligence (GenAI) could enhance productivity in India’s retail industry by 35-37% over the next five years. The report, titled ‘The AIdea of India: 2025’, reveals that 48% of Indian businesses have already initiated proof of concept (PoCs) for GenAI solutions, while another 32% are planning to invest or have allocated budgets for AI adoption.

In January 2025, the Unified Payments Interface (UPI) facilitated a total of 16,996 crore transactions, with the platform processing over Rs. 23.48 lakh crore (US$ 270.3 billion) in value.

In May 2025, UPI transactions reached an all-time high of 18.68 billion in volume and Rs. 25.14 trillion (US$ 294 billion) in value, marking a 33% year-on-year increase in volume and a 23% rise in value compared to May 2024. Unified Payments Interface

(UPI) transactions surged to a record high in March 2025, reaching Rs. 24.77 trillion (US$ 290 million) in value and 19.78 billion in volume.

The volume of digital payment transactions reached 222.19 billion in FY25, up from 164.43 billion in FY24.

As reported by Counterpoint Research, India's smartphone market has positioned itself as the second largest in the world by unit volume and the third largest by value in the third quarter of CY24. During this period, India represented 15.5% of global smartphone shipments.

According to the International Data Corporation's (IDC) Worldwide Quarterly Mobile Phone Tracker, India's smartphone market experienced a year-over-year (YoY) growth of 4%, with total shipments reaching 151 million units. The robust performance in the first half of the year, which saw a growth rate of 7%, offset the slower growth in the second half, where the rate was only 2%.

India's e-retail market is projected to exceed US$ 160 billion by 2028, driven by strong post-pandemic growth and significant potential for expansion, as online spending currently represents only 5-6% of total retail spending compared to much higher rates in the US and China.

Long-term fundamentals remain strong, with e-retail expected to grow over 18% annually, reaching Rs. 14.5 lakh crore (US$ 170 billion) in gross merchandise value (GMV) by 2030. Nearly one in ten retail dollars will be spent online, driven by rising discretionary spending as India’s per capita GDP exceeds to Rs.3,00,000-4,00,000 lakh (US$ 3,500–4,000).

India is poised for massive growth, with India’s quick commerce market expected to reach Rs. 43,435 crore (US$ 5.0 billion) by FY25 and Rs. 86,001 crore (US$ 9.9 billion) by FY29.

HUL, Britannia, AWL Agri-Business, Dabur, Tata Consumer Products, and Marico—posted cumulative quick commerce sales of over Rs. 4,400 crore (US$ 515 million) in FY25.

India's Business-to-Business (B2B) online marketplace would be a US$ 200 billion opportunity by 2030.

The Indian e-commerce market is projected to grow from US$ 123 billion in FY24 to US$ 292.3 billion in FY28, reflecting a compound annual growth rate (CAGR) of 18.7%.

According to a Deloitte India Report, as India is moving towards becoming the third-largest consumer market, the country's online retail market size is expected to reach US$ 325 billion by 2030, up from US$ 70 billion in 2022, largely due to the rapid expansion of e-commerce in tier-2 and tier-3 cities.

The e-commerce industry in India demonstrated remarkable resilience and diversification in FY23, recording a robust 26.2% jump in order volumes. This growth was primarily driven by a 31.1% surge in demand from tier-1 cities, as work-from-office arrangements resumed following the pandemic-induced disruptions.

In FY24, tech and e-commerce giants Google, Meta, Amazon, and Flipkart generated over Rs. 60,000 crore (US$ 7.19 billion) in advertising revenue, a 9% increase from Rs. 55,053 crore (US$ 6.60 billion) in FY23.

The number of online shoppers in India surged from 140 million in 2020 to nearly 260 million in 2024.

Projections indicate this figure will nearly double to 300 million by 2030 and reach 700 million by 2035, with a significant portion of this growth stemming from Tier-2 cities.

India has the opportunity to significantly increase its share in the global B2C e-commerce market, which is projected to reach US$ 8 trillion by 2030. With current e-commerce exports at US$ 2 billion, there is substantial room for growth, particularly in high-demand products.

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

Propelled by rising smartphone penetration, the launch of the 4G network and increasing consumer wealth, the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion in 2017.

After China and the US, India had the third-largest online shopper base of 150 million in FY21 and is expected to be 350 million by FY26.

During 2019 and 2026, the number of online shoppers in India is expected to increase dramatically at a CAGR of 22% to 88 mn in rural India and 15% to 263 mn in urban India.

Indian consumers are increasingly adopting 5G smartphones even before the rollout of the next-gen mobile broadband technology in the country. Smartphone shipments reached 169 million in 2021 with 5G shipments registering a growth of 555% year-on-year over 2020. Indian consumers are increasingly adopting 5G smartphones even before the rollout of the next-gen mobile broadband technology in the country. Smartphone shipments reached 150 million units and 5G smartphone shipments crossed four million in 2020, driven by high consumer demand post-lockdown. According to a report published by IAMAI and Kantar Research, India’s 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.

For the first week of 2023 festive season, Indian e-commerce platforms generated sales worth US$ 5.67 billion Gross Merchandise Value (GMV).

Investments/Developments

Some of the major developments in the Indian e-commerce sector are as follows:

In FY25, Udaan raised Rs. 975 crore (US$ 114 million), in funding at a valuation of Rs. 15,403 crore (US$ 1.8 billion), from investors including M&G Investments and Lightspeed.
Flipkart’s Indian marketplace entity received a cash infusion of Rs. 2,225 crore (US$ 260 million) from its Singapore-based parent, according to regulatory filing.
In FY25, Flipkart’s logistics arm, Ekart, has joined the government-backed ONDC network to extend its delivery services to more e-commerce sellers and buyers, improving efficiency and supporting small sellers nationwide.
In FY25, JioMart partnered with Meta to enable grocery shopping directly on WhatsApp, allowing users to browse and buy groceries seamlessly
Nestle India to invest Rs. 5,000 crore (US$ 585 million) in capacity expansion, new product lines, and sustainability across its factories.
In February 2025, Adani Group has announced an investment of Rs. 30,000 crore (US$ 3.46 billion) in Kerala over the next five years, focusing on infrastructure, logistics, and manufacturing expansion. The group, which is already developing the Vizhinjam port and operating Thiruvananthapuram International Airport, has invested Rs. 5,000 crore (US$ 577.1 million) in the port project and committed an additional Rs. 20,000 crore (US$ 2.31 billion).
E-commerce leader Amazon and the Directorate General of Foreign Trade (DGFT) have renewed their partnership to enhance e-commerce exports from India. This extended collaboration builds on the initial memorandum of understanding (MoU) signed in November 2023 and focuses on equipping Indian MSMEs with the essential skills and resources needed to succeed in the e-commerce export sector, as stated by the company.
Decathlon has partnered with Myntra to enhance its e-commerce presence in India, leveraging Myntra's extensive network to reach tier I, II, and III cities, particularly in emerging sports markets like Northeast India, while offering a wide range of sports products and planning to invest US$ 11.48 million over the next five years to expand its retail footprint and digital capabilities.
On May 17, 2024, IKEA announced a partnership with Rhenus to enhance its e-commerce expansion in the Delhi NCR region by establishing a 150,000 sq ft warehouse in Gurgaon, designed to store and fulfill over 7,000 products.
Google LLC is investing US$ 350 million in Flipkart as part of a nearly US$ 1 billion funding round led by Walmart Inc., Flipkart's majority stakeholder, with the investment aimed at expanding Flipkart's business and modernizing its digital infrastructure to serve customers across India, and the two companies also plan to increase Flipkart's use of Google's cloud platform.
The indigenous e-commerce giant Flipkart is poised to raise US$ 1 billion in a new funding round, with its parent company Walmart anticipated to contribute US$ 600 million.
On August 25, 2023, Zepto, a two-year-old company, achieved unicorn status by securing US$ 200 million in funding, resulting in a valuation of US$ 1.4 billion, marking India's inaugural unicorn of 2023.
In October 2023, Tata Group announced a US$ 1 billion investment in its super app, Tata Neu, in addition to the US$ 2 billion previously invested in its digital division earlier that year.
In 2023, Amazon India achieved significant milestones, including surpassing a seller base of 14 lakh with three lakh new additions, digitizing 6.2 million small businesses, facilitating US$ 8 billion in exports, and generating 1.3 million jobs. Additionally, they committed to further digitizing 10 million businesses, enabling US$ 20 billion in exports, and create two million jobs by 2025, while also signing an MoU with DGFT for MSME capacity-building initiatives.
On January 17, 2024, Shiprocket and Truecaller collaborated to empower sellers with seamless e-commerce transactions. This strategic partnership aims to streamline mobile onboarding to shopping journeys for three lakh Shiprocket merchants, enhancing the consumer experience.
On December 4, 2023, ODN partnered with Middle East-based Channel Engine for the GCC e-commerce market, aiming to redefine the landscape by connecting brands and retailers to global sales channels for cross-border success.
On February 6, 2024, Flipkart inaugurated its fourth grocery fulfilment centre in Malda, West Bengal, fostering over 700 local jobs and facilitating nationwide market access for local sellers, MSMEs, and farmers. The 1.13 lakh square feet center processes over 7,000 orders daily, affirming Flipkart's commitment to prompt delivery and enhancing regional economic prospects.
In October 2023, a tech-driven logistics platform iThink Logistics announced a strategic collaboration with India Post to boost e-commerce deliveries across remote parts of the country.
Amazon CEO Mr. Andy Jassy announced that the company is committed to investing US$ 26 billion in India by 2030, out of which US$ 11 billion has already been invested.
In July 2023, the post office departments of Canada and India recently entered into an agreement, which is aimed at facilitating e-commerce exports and establishing an International Tracked Packet Service (ITPS) between the two countries.
As of May 2023, the Indian government's open e-commerce network ONDC has expanded its operations into 236 cities in the country while adding more than 36,000 merchants.
In June 2023, Amazon India launched its new and affordable Amazon Prime Lite membership plan for shoppers in the country.
Walmart is preparing to spend over US$ 2.5 billion in India as the retailer doubles down on the opportunities it sees in India’s e-commerce and payments markets.
Hyperlocal e-commerce startup, Magicpin announced that its daily order volume has zoomed 100-fold to 10,000 per day from over 100 within a month of joining the government-promoted Open Network for Digital Commerce (ONDC) network.

Government Initiatives

Since 2014, the Government of India has announced various initiatives, namely Digital India, Make in India, Start-up India, Skill India, and Innovation Fund. The timely and effective implementation of such programs will likely support the growth of E-commerce in the country. Some of the major initiatives taken by the Government to promote E-commerce in India are as follows:

Government initiatives like the National Logistics Policy aim to smoothen deliveries to hinterlands, making logistics efficient and cost-effective. Government initiatives like Jan Dhan Yojana, BharatNet Project, and the introduction of Goods & Service Tax (GST) have played a crucial role in shaping India's digital economy. Through its ‘Digital India’ campaign, the Government of India is aiming to create a trillion-dollar online economy by 2025
The Government e-Marketplace (GeM) crossed a GMV of Rs. 5 lakh crore (US$ 58.5 billion) in FY25, achieving the feat 18 days before year-end. Services led the growth, contributing 62% Rs. 2.54 lakh crore (US$ 29.7 billion), while. products made up 38% to Rs. 1.55 lakh crore (US$ 18.1 billion).
As of March 2024, the GeM portal served 5.8 million orders worth Rs. 3,87,006 crore (US$ 46.67 billion) with 148,245 primary buyers and 215,743 secondary buyers.
On February 4, 2024, CSC and ONDC partnered to expand e-commerce reach to rural areas in India. This collaboration integrates CSC's e-Grameen app with the ONDC network, providing citizens across rural India access to a vast e-commerce network, fostering entrepreneurship opportunities and driving the vision of Gram Swaraj.
On February 14, 2024, the Ministry of Defence (MoD) announced that procurement through the Government e-Market (GeM) portal has exceeded Rs. 1 lakh crore (US$ 12.06 billion), with nearly half of the transactions occurring in the current fiscal year. GeM, launched in 2016, facilitates online purchases for central government ministries. MoD has executed over 5.47 lakh orders, with approximately Rs. 45,800 crore (US$ 5.52 billion) awarded this fiscal year. Notably, 50.7% of orders, totalling Rs. 60,593 crore (US$ 7.31 billion) have been awarded to Micro and Small Enterprises (MSEs). GeM has emerged as a pivotal platform for optimizing public spending in the Defence sector, with the Ministry showcasing a resolute commitment towards efficient procurement practices.
Government e-Marketplace (GeM) is an online platform for public procurement in India that was launched on August 9, 2016, by the Ministry of Commerce and Industry with the objective of creating an inclusive, efficient, and transparent platform for the buyers and sellers to carry out procurement activities in a fair and competitive manner.
In FY23, the procurement of goods and services from the government portal crossed the Rs. 2 lakh crore (US$ 24 billion) mark.
As of November 2022, the GeM portal has served 12.28 million orders worth Rs. 3,34,933 crore (US$ 40.97 billion) from 5.44 million registered sellers and service providers for 62,247 buyer organizations.
In a bid to systematise the onboarding process of retailers on e-commerce platforms, the Department for Promotion of Industry, and Internal Trade (DPIIT) is reportedly planning to use the Open Network for Digital Commerce (ONDC) to set protocols for cataloguing, vendor discovery and price discovery. The department aims to provide equal opportunities to all marketplace players to make optimum use of the e-commerce ecosystem in the larger interest of the country and its citizens.
National Retail Policy: The government had identified five areas in its proposed national retail policy—ease of doing business, rationalisation of the licence process, digitisation of retail, focus on reforms and an open network for digital commerce—stating that offline retail and e-commerce need to be administered in an integral manner.

Road Ahead

The E-commerce industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology and training and has a favourable cascading effect on other industries as well. 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 FY34. Technology-enabled innovations like digital payments, hyper-local logistics, analytics-driven customer engagement and digital advertisements will likely support the growth in the sector. India is also planning to introduce an Open Network for Digital Commerce (ONDC). ONDC will enable e-commerce platforms to synchronize search results on all the e-commerce platforms and display products and services from every platform. This will further boost business for MSMEs and help fuel India’s e-commerce growth. The growth in the sector will further encourage employment, increase revenues from exports, increase tax collection by exchequers, and provide better products and services to customers in the long term.

India has gained 125 million online shoppers in the past three years, with another 80 million expected to join by FY25, according to a report by Kantar.

According to Bain & Company report, India’s social commerce gross merchandise value (GMV) stood at ~US$ 2 billion in 2020. By FY25, it is expected to reach US$ 20 billion, with a potentially monumental jump to US$ 70 billion by FY30, owing to high mobile usage.

References: Media Reports, Press releases, Business Standard, Economic Times, LiveMint, Times Now, Times of India