India's e-commerce market might surge to $345B by 2030
What's the story
India's e-commerce market is expected to grow from $145 billion in FY2025 to a whopping $345 billion by FY2030, at a compound annual growth rate (CAGR) of 19%. The growth will be driven by rising urbanization, changing consumer behavior, and the increasing use of digital payments. The prediction comes from an industry insights report by Rubix.
Market position
E-commerce accounts for only 7-9% of total retail sales
The report highlights India's rapid rise as a global retail powerhouse, making it the third-largest retail market in 2024. In FY2025, India's e-commerce sector recorded a Gross Merchandise Value (GMV) of $14 billion, growing at 12% year-on-year. However, e-commerce still accounts for only 7-9% of total retail sales in the country, indicating plenty of room for growth.
Sector analysis
Beauty segment fastest-growing online category
The beauty segment has emerged as the fastest-growing online category, driven by influencer marketing, increased digital penetration, and demand for personalized and convenient products. A 57.5% increase in per capita net income over the past decade has fueled discretionary spending. Since 2020, Tier-3 and smaller cities have accounted for 60% of new online shoppers and 45% of total orders.
Policy impact
Rise in female workforce participation driving demand
Government initiatives like the National Logistics Policy and Digital India are enhancing supply chain efficiency and digital access, allowing deeper penetration. The rise in female workforce participation from 23% in 2018 to 42% in 2024 has resulted in more dual-income households, driving demand for lifestyle and premium products. The report notes that as digital infrastructure improves across rural-urban divides, consumption patterns are changing structurally.
Policy shift
Proposed policy changes could benefit e-commerce giants
The Indian government is considering a policy change to ease foreign investment rules. If implemented, this would allow global e-commerce giants like Amazon to directly procure goods from Indian sellers for export. Currently, these companies can only operate as intermediaries without direct access to domestic or international retail transactions. The proposed changes would bring a third-party export facilitation model, enabling a dedicated export entity linked to e-commerce platforms to handle compliance and regulatory processes.