Information & Technology

E-Commerce Industry Eyes USD 100 Billion Market Size by 2027

• By Jayesh M
• 2025-05-07

India's e-commerce market is poised for a significant revolution, with industry projections indicating a historic GMV of US$100 billion by 2027. With the help of massive investments from multinational corporations, forward-thinking FDI regulations, and a swift change in consumer preferences toward online shopping, India is outpacing conventional retail channels. Access to online markets is becoming more accessible to all, from Tier I metro areas to newly developing Tier III towns, due to increased smartphone adoption, more inexpensive data plans, and improved logistical networks. In one of the fastest-growing internet economies in the world, India's e-commerce industry is poised to surpass the $100 billion mark and transform retail dynamics as fintech technologies expedite payments and AI-driven personalization enhances the customer experience.

FDI Inflows and Tech Upgrades Propel India’s E-Commerce Towards $100B Milestone

India's e-commerce sector is expanding rapidly because to social commerce, B2B marketplaces, and robust foreign investment support. Government regulations permitting 100% FDI in marketplace and business-to-business models have given platforms access to large sums of money and innovative technology alliances. International trust in India's digital retail story is reinforced by marquee investments, such as Walmart's $600 million and Google's $350 million infusions into Flipkart. This expansion is also being fueled by increased smartphone usage, growing digital payments adoption, and improved logistics infrastructure. According to industry associations, the sector will continue to grow, reaching a GMV of US$100 billion by 2027 and on track to reach US$345 billion by 2030, due to continuous advancements in AI-driven customisation and last-mile delivery.

The government's liberal Foreign Direct Investment (FDI) environment, which allows 100% FDI in both B2B e-commerce and the marketplace model under the automatic route, is a key component of India's digital retail growth. This makes India one of the few major marketplaces in the world with such open rules. These regulations distinguish between inventory-based platforms (where FDI is still prohibited) and marketplace platforms that only facilitate transactions between third-party sellers. They were first stated in Press Note 2/2000 (for B2B) and further explained in Press Note 3 of 2016 (for the marketplace model). The Consolidated FDI Policy Circular of 2020 reiterated these clauses, specifically permitting 100 percent FDI for e-commerce marketplace entities while maintaining "level playing field" protections, like forbidding platforms from setting sale prices and preventing single-vendor dominance beyond 25 percent of sales.

Flipkart Secures Nearly $1 Billion from Walmart and Google to Fuel India’s $100 B E-Commerce Ambitions

The recent funding round of almost $1 billion for Flipkart, which was led by a US$600 million investment from Walmart and a US$350 million investment from Google, highlights the growing investor confidence in India's e-commerce success story. Walmart revealed its investment in December 2023 with the goal of helping Flipkart expand its marketplace capabilities and logistical network throughout India's quickly expanding digital retail industry. Google's US$350 million minority investment in Flipkart secures a strategic cloud services relationship to update Flipkart's digital infrastructure in addition to providing new equity. These investments collectively demonstrate the dedication of international retailers and IT companies to seizing India's estimated $100 billion e-commerce market by 2027, as consumer adoption surges outside of urban areas into tier-II and tier-III cities.