Clipped from: https://www.financialexpress.com/opinion/e-commerce-promise-for-a-viksit-bharat/4117675/
The goal should not be regulation of the sector for its own sake, but a framework that fuels growth and fairness equally
E-commerce is one of the defining narratives of India’s economic transformation. What began as a niche, urban-centric phenomenon has rapidly become a core pillar of economy, MSME empowerment, jobs, retail, digital payments, logistics, and exports. Yet the question is, how can we harness its full promise for Viksit Bharat with fair competition and inclusive growth?
India’s e-commerce market is projected to expand from around $125 billion in 2024 to $345 billion by 2030, and approach $550 billion by 2035 driven by rising internet penetration, smartphone adoption, ease in transactions, and growing middle-class consumption. Significantly, Flipkart, the largest platform, has got an approval to flip back to India, paving the way for an initial public offering.
Domestic digital payments underpin this growth. Unified Payments Interface (UPI) processed an astounding 20 billion transactions with nearly $289 billion in value last August alone, showing how deeply digital commerce has permeated everyday life, including in tier-II and -III cities.
With scale comes scrutiny—particularly over competition and fair play. The Competition Commission of India (CCI) rightly recognised that e-commerce brings novel market dynamics that differ from traditional retail. Its enforcement actions and investigations into practices were meant to uphold competition law while allowing markets to evolve organically. Judicial oversight has reinforced the CCI’s mandate, ensuring that checks and balances operate within the constitutional and legal framework.
Different stakeholders view the sector through different lenses. Platforms highlight innovation and customer benefits—personalised search, price discovery, ease of transactions, efficient logistics, fast delivery, and digital payments—as core drivers of consumer welfare. MSMEs and artisans see digital marketplaces as a doorway to markets previously out of reach though they also flag challenges around compliance, fees, and algorithmic opacity. Consumers have benefitted from competitive prices; convenience and doorstep delivery, with concerns about discount sustainability and data-driven pricing.
This multiplicity of perspectives underscores why policy cannot be one-dimensional. Balanced regulation must promote efficiency while preventing dominance. Government platforms like the Open Network for Digital Commerce will democratise, although public digital infrastructure may complement private platforms, not substitute.
E-commerce’s biggest social and economic contribution lies in its ability to integrate MSMEs and artisans from the hinterland into the mainstream economy.About 70% of e-commerce sales in India are attributed to MSMEs, reflecting how digital platforms have provided entry for small businesses and craftsmen including women-led enterprises.
Digital tools are helping ground realities—over 73% of MSMEs in semi-urban and rural India have reported business growth after adopting digital transactions and platforms, driven by smartphones and UPI. Large platforms are helping the digitisation of small stores.
On the export front, the potential is enormous but under-leveraged. However, Flipkart and Amazon are helping sellers reach over $20 billion, with targets of scaling this to $80 billion by 2030, underscoring global reach.
Employment benefits are equally significant. E-commerce catalyses jobs in logistics, supply chain management, digital marketing, tech support, and customer service, with new investments set to generate millions of new jobs.
The next frontier of growth will be artificial intelligence (AI), machine learning, predictive analytics, and automation.
Generative AI alone could enhance productivity in retail by about 35% by 2030, enabling smarter supply chains, personalised marketing, dynamic pricing, and better inventory management. AI-driven loyalty systems, virtual shopping assistants, and real-time demand forecasting will help small sellers. These technologies can mitigate traditional barriers, giving online sellers a global reach.
Despite the promise, challenges persist. Algorithmic opacity in ranking and pricing can inadvertently favour larger sellers. Quick commerce models have drawn scrutiny over pricing strategies that may edge out local stores.Data privacy and cybersecurity remain paramount; as e-commerce expands, so do the risks of breaches and misuse of personal and commercial data.
To ensure India’s e-commerce ecosystem is competitive, inclusive and future-ready, we need multi-layered reforms. The first layer involves empowering competition-centric regulation by strengthening the CCI’s analytical capabilities to monitor data-driven digital markets and algorithmic impacts; promoting interoperability and data portability to reduce entry barriers; explicitly distinguishing between marketplace-led enablement models and inventory-led dominance so that regulatory responses are seen as proportionate to structure; and focusing on the value of evidence-based, ex-post enforcement over heavy ex-ante prescriptions to strengthen the competition narrative.
The second layer should involve MSMEs and export enablement. Export procedures should be simplified with digital-first documentation and compliance portals; targeted training and incentives must be provided for cross-border e-commerce; and schemes like One District One Product and GI must be aligned with monitoring.
The third layer should concern technology adoption support by enabling MSMEs’ access to AI, cloud infrastructure, and digital tools and creating innovation clusters to integrate e-commerce with supply chain, logistics, and payment ecosystems.
Finally, for consumer protection and digital safety, transparency should be enforced in ranking, pricing, and data usage. Cybersecurity frameworks should also be strengthened for digital payments.
India’s e-commerce evolution is a story of entrepreneurial aspiration, technological innovation, and economic inclusion. With prudent competition policy, calibrated regulation, and forward-looking technology enablement, this sector can not only deliver consumers greater choice and value, but also empower MSMEs, boost exports, create jobs, and strengthen the economy. The goal should not be regulation for its own sake, but a framework that fuels growth and fairness equally.
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