India's E-commerce Market to Nearly Triple to $214 Billion by FY30, Driven by Rising Retail Penetration: ICICI Securities

India's E-commerce Market Projected to Reach $174-214 Billion by FY30

India's e-commerce market is expected to nearly triple to $174-214 billion by FY30 from around $70 billion in FY25, while e-commerce penetration in overall retail is projected to rise from 7 percent to 13 percent during the period, according to an ICICI Securities report. The brokerage said India's e-commerce market has grown at a compound annual growth rate (CAGR) of around 20 percent over FY20-25 and is expected to continue expanding at a 20-25 percent CAGR over the next five years.

The report highlights the significant growth potential of India's e-commerce market, driven by increasing internet penetration and affordable mobile data. Currently, India has nearly 970 million internet subscribers and around 500 million online shoppers. ICICI Securities estimated that Tier-II and smaller cities will contribute more than 60 percent of incremental e-commerce demand by 2026, as online shopping penetration deepens beyond metros.

Smartphones and electronics continue to dominate India's e-commerce market, accounting for nearly 50 percent of gross merchandise value (GMV). However, categories such as fashion, grocery, beauty, and appliances are emerging as major growth drivers. Fashion currently contributes around 15-20 percent of e-commerce GMV, while grocery remains underpenetrated despite witnessing rapid growth through quick-commerce platforms. Appliances remain a relatively untapped category, with products such as washing machines and air-conditioners still having household penetration levels below 20 percent in India.

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The report also notes that advertising income is becoming an increasingly important revenue stream for e-commerce platforms alongside commissions and logistics services. Ad income contributes around 1-3.5 percent of GMV for major e-commerce platforms, while blended take rates across marketplaces currently stand at roughly 20-23 percent.

The report comes amid intensifying competition across India's e-commerce and quick-commerce sectors. Amazon recently announced a fresh Rs 2,800-crore investment to expand its India operations network, including fulfilment and quick-commerce infrastructure. Flipkart, meanwhile, continues to scale its logistics and same-day delivery network, while newer players such as Meesho deepen their presence in value commerce.

Despite years of rapid expansion, ICICI Securities said India's e-commerce market remains significantly underpenetrated compared with global peers, suggesting substantial long-term headroom for growth.

E-commerce Market Growth Comparison

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