India’s E-commerce market is expected to grow to $325 billion by 2030: Invest India
- Invest India also highlighted that India will become the 3rd largest online retail market by scale in 2030.
- Invest India is the National Investment Promotion and Facilitation Agency. It is set up as a non-profit venture under the Ministry of Commerce and Industry.
- Current Status of E-commerce:
- In 2022, sector was worth $70 billion and makes about 7% of India’s total retail market.
- Key E-commerce models:
- Inventory Based: In it, Inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly.
- FDI is not permitted.
- Market Based: In it, an e-commerce entity provides an information technology platform to connect buyers and sellers. E.g.
Amazon- 100% FDI under automatic route is permitted.
- Inventory Based: In it, Inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly.
- Key Drivers of E-commerce:
- Increase in internet penetration (52% as of 2022)
- Promotion of Digital infrastructure (like eKYC and Unified Payments Interface)
- Rise of rural-led Value e-commerce (by 2026 over 60% of e-commerce demand is predicted to come from tier 2-4 towns and rural India).
- Key Challenges: Digital divide in many regions, piracy and counterfeit products, domination by foreign entities such as Amazon etc.
- Key Initiatives to Promote e-commerce
- Draft e-Commerce Policy: Aims to create a facilitative regulatory environment for growth of e-commerce sector.
- Open Network for Digital Commerce: It open source e-commerce network that connects shoppers, platforms, and retailers.
- Others: Consumer Protection (E-Commerce) Rules, 2020; National Logistics Policy, 2022, India Stack etc.