India's e-commerce market to touch $250 billion by 2030 on back of AI, demand from small cities

India's e-commerce market is expected to grow to $250 billion by 2030, from an estimated $90 billion in 2025, as artificial intelligence (AI), vernacular commerce and rising internet adoption across smaller towns accelerate the country's digital retail ecosystem, according to a report released jointly by Shiprocket and Deloitte.

The report, titled 'AI for Bharat Commerce: Unlocking the $250 Billion Business Opportunity', argues that the next phase of growth will be driven not only by technology but also by the rapid expansion of digital consumption beyond India's metros. It highlights AI-powered personalisation, intelligent product discovery, predictive customer engagement and fulfilment innovation as the key forces reshaping online shopping.

A significant share of this growth is expected to come from Bharat. The report notes that India has 488 million rural internet users, accounting for 55% of the country's active internet population, while 98% of internet users consume content in Indic languages. Vernacular voice queries have grown 156% faster than English-language searches, signalling a shift towards regional language-first digital experiences.

Tier-II and Tier-III cities have also emerged as the backbone of online commerce, accounting for more than 60% of India's online shoppers, reflecting the growing purchasing power and digital adoption in non-metro markets.

Can AI and Bharat together power India's next e-commerce boom?

The report identifies three structural trends shaping India's e-commerce landscape over the next five years: AI-powered personalisation through conversational commerce and visual discovery, AI-driven conversion intelligence that improves customer engagement and retention, and Bharat-led digital adoption supported by deeper internet penetration and vernacular content consumption.

Consumer acceptance of AI is also rising rapidly. According to the study, 90% of Indian consumers believe generative AI has improved their online shopping experience. On the business side, recognised returning customers convert at 2.1 times the rate of new users, while brands with repeat purchase rates above 25% generate profit margins 3.4 times higher than those with repeat purchase rates below 15%.

"Consumers today expect faster, more personalised and more convenient shopping experiences. For businesses, this means investing in AI, strengthening fulfilment capabilities and building experiences that cater to customers across both metro and emerging markets," said Saahil Goel, managing director and CEO, Shiprocket.

Echoing the opportunity ahead, Dr Anand Ramanathan, partner and consumer industry leader at Deloitte India, said the next phase of India's commerce story will belong to companies that apply AI "with precision, speed and discipline."

The report combines industry research, market trends and Shiprocket's commerce insights to assess how AI is transforming product discovery, customer engagement, fulfilment and the broader digital commerce ecosystem, while positioning Bharat as the next major growth engine for India's online retail market.