What makes digital India tick? Rising connectivity and smartphone adoption are key structural drivers. Digital payments and e-governance offer vital catalytic sparks. But, the heart of Digital India—what gives it life, reach, and vigor—is its e-commerce ecosystem: the constellation of apps, marketplaces, mobile payments, and logistics services that help Indians bridge their online and offline worlds.
Over the past eight years, India’s e-commerce ecosystem has experienced signiﬁcant transformation and growth, rising from an estimated $21 billion in 2014 to $55 billion in 2021. COVID-19 has only accelerated the use of e-commerce services, with online retail and grocery delivery emerging as critical lifelines for Indians facing pandemic lockdowns and supply-chain disruptions. Today, e-commerce services have expanded to nearly every Indian city and pin code, and 60 percent of all e-commerce transactions and online orders now come from shoppers residing in Tier II Indian cities. This ﬂurry of activity has also catalyzed new job creation across India’s digital economy and retail sector, where hybrid models of “online-offline” commerce are estimated to create twelve million jobs over the next eight years. Still, e-commerce accounts for only 4 percent of India’s overall retail market at present, with physical retail holding strong.
Taken together, the profound shifts across India’s e-commerce landscape—as well as the global digital economy—have created new realities in India that were unthinkable even ﬁve years ago: groceries arriving fully paid for within ﬁfteen minutes of an order, rideshares zooming Indians to every corner of bustling towns, e-pharmacies delivering medicine straight to a family’s doorstep, and marketplaces bringing village textiles to online buyers at home and overseas. Of course, these transformations are not without tension. Small ﬁrms and traditional retailers fear e-commerce undermining prices and eliminating jobs. Domestic tech companies and homegrown startups call for a “level playing ﬁeld” against foreign competitors armed with large-scale capital. Government officials are eager to rein in “Big Tech,” just as leading politicians look to promote a “self-reliant” India, scale homegrown platforms, and build a $1-trillion digital economy by 2025.
For their part, Indian policymakers have sought to respond to these complex and competing political imperatives while crafting new policies to regulate and grow the e-commerce ecosystem. In practice, however, recent policy initiatives have concentrated largely on curbing the market power of foreign e-commerce platforms, without necessarily clarifying principles that should govern the broader e-commerce landscape and the multiplicity of actors operating within it.
As India looks to revise its e-commerce frameworks, policymakers in Delhi have a unique opportunity to articulate core principles and processes that can deliver practical, inclusive, and durable policy solutions. This issue brief contributes to that effort by: identifying key political dynamics shaping India’s approach to e-commerce regulation; surveying recent Indian attempts to regulate e-commerce; identifying key themes and lessons learned from past policies; and outlining principles and processes that can shape new e-commerce rules going forward.
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