India’s e-commerce market is projected to experience substantial growth, with payments expected to reach $292.3 billion by 2028, according to a new report. This increase, driven by heightened consumer preference for online shopping and robust internet penetration, represents a compound annual growth rate (CAGR) of 18.7%, up from $147.3 billion this year.

The report highlights that the growth in e-commerce payments is buoyed by government initiatives such as ‘Make in India’ and ‘Startup India,’ alongside a rising number of online shoppers. The market is anticipated to grow by 23.8% in 2024, as per GlobalData, a prominent data and analytics firm.

Ravi Sharma from GlobalData noted that the positive trend in e-commerce sales in India is likely to persist, supported by increased consumer preference, enhanced payment infrastructure, and the growing popularity of alternative payment solutions.

Data from the Telecom Regulatory Authority of India (TRAI) revealed that internet subscribers in the country had surged to 954 million as of March 2024, up from 881 million in March 2023. This surge is encouraging small and medium enterprises (SMEs) to enter the e-commerce sector.

The report also indicates that alternative payment solutions are leading in consumer preference, with a market share of 58% in 2023. Popular brands in this category include Amazon Pay and Google Pay. Payment cards are the second most popular method, holding a 25.7% market share, with credit and charge cards preferred by 15.4% of users. Meanwhile, cash payments have declined, now representing only 6.2% of online purchases.

This growth underscores India’s rapid transition towards digital payments and the increasing reliance on alternative payment methods among online shoppers.