FDI in E-Commerce Sectors

The Indian retail industry is a fast-paced industry with a tremendous potential to grow. India’s e-commerce market has witnessed a phenomenal growth in the past recent years and is still flourishing. Foreign Direct Investment in E-Commerce in India can lead to an influx of capital, further enhancing its growth potential.

100 percent FDI in e-commerce in south India is allowed via the automatic channel, therefore, leading to increased opportunities in the Indian retail industry. FDI will lead to a growth in the country’s economy with foreign companies entering the retail market. This will pave a way for more job opportunities, also opening new avenues for franchising. E-commerce FDI rules have been regularly


Industry Scenario

India’s e-commerce market is also set to grow at a 30% compound annual growth rate for gross merchandise value to be worth USD 200 bn by 2026 and market penetration will increase to 12% from existing 2%.

India is largely an unorganized retail market, contributing 92% to the total retail sector in India. Currently, the organized retail market is valued at USD 60 bn, and the unorganized market holds the rest. The organized retail market is projected to increase to 13% by 2020, with the unorganized market reducing to 87%. Organized retail therefore, has the potential to reach approx. USD 140-160 bn.


  • 1
    India Ranked No. 1 in Global Retail Development Index (GRDI) in 2017
  • 2
    By 2021, India to have more internet users (650 mn) than entire population of six G7 Countries
  • 3
    India to become third-largest consumer economy (consumption expenditure to increase by factor of 3 to reach USD 4 tn) by 2025



1. February 2018 - British tech firm Dyson will invest USD 200 million into its Indian operations over the next five years and will set up 20 stores across Delhi-NCR, Mumbai and Bengaluru.

2. May 2017 - The world’s largest furniture retailer, IKEA, plans to invest USD 3 bn in setting up 25 stores in India,  planning to double their sourcing from India to USD 717 mn from about USD 358 mn

3. November 2017 - Amazon’s third capital infusion of USD 435 mn into its India business this year takes its total investment in Amazon Seller Services to USD 2.6 bn

4. November 2017 - Ahmedabad-based Havmor Ice Cream Ltd has been fully acquired by South Korean major LOTTE Confectionery for USD 153 mn

FDI Facts

3.3 bn FDI inflows (in USD) in retail during November 2014 – November 2017 (Invest India estimate)

100% FDI allowed in Single Brand Product Retail (Online Presence Allowed) under automatic route. 

100% FDI allowed in e-commerce (B2B & Marketplace for B2C) under automatic route

100% FDI allowed in Cash & Carry Wholesale Trading under automatic route

100% FDI allowed under Duty-Free Shops under automatic route

100% FDI allowed in Food Product Retail under automatic route

51% FDI is allowed in Multi-Brand Product Retail (Online Presence Not Allowed) under government route.