India’s online retail market is expected to surpass $90 billion in 2026, driven by strong grocery, beauty, and home category sales, while mobile phone growth slows significantly.
India’s online retail industry is projected to cross $90 billion in 2026, recording annual growth of 22–24%, according to a report by Redseer Strategy Consultants. This would mark the sector’s strongest annual expansion in five years, supported by rising demand for essential and everyday consumer products.
E-commerce gross merchandise value (GMV) grew approximately 25% year-on-year to nearly $38 billion during the first half of 2026. The report described this as the strongest first-half performance in four years, reflecting increasing consumer activity across online shopping platforms.
However, the drivers of growth are changing. Grocery and other daily-use categories are gaining momentum, while mobile phone sales are facing pressure from higher prices.
Grocery is expected to overtake mobile phones and become India’s second-largest online retail category, behind fashion. Redseer Partner Kushal Bhatnagar noted that online retail is expanding most rapidly in categories supported by consistent consumer demand.
Grocery is forecast to grow by 50–53% during 2026. Its share of the overall online retail market is projected to rise from 16% in 2025 to 19% this year.
The segment is also expected to contribute nearly one-third of the additional GMV generated by online retail in 2026. This growth highlights the increasing importance of everyday consumption in shaping India’s e-commerce market.
In comparison, mobile phone sales are projected to grow by only 2–3% for the full year, following flat growth in the first half. The category’s market share could decline from approximately 19% in 2025 to around 16% in 2026.
Alongside grocery, beauty and personal care (BPC), as well as home and furniture, are expected to make significant contributions to online retail expansion.
According to Redseer’s estimates, BPC sales could increase by 36–39% in 2026, while the home and furniture category may record growth of 31–34%.
Together, grocery, BPC, and home and furniture are expected to account for approximately 40% of India’s online retail GMV in 2026. These categories could contribute around 60% of the additional GMV generated during the year.
The projections indicate that consumers are increasingly using e-commerce platforms for a broader range of purchases beyond smartphones and other electronic devices.
The electronics category recorded a notable recovery, with sales rising 22% year-on-year in the first half of 2026 after contracting 5% during the corresponding period in 2025.
Redseer attributed the improvement to several temporary demand drivers. These included the reduction in the Goods and Services Tax (GST) on large appliances from 28% to 18% in September 2025, aggressive air-conditioner discounts following changes to Bureau of Energy Efficiency star-rating requirements, and early laptop purchases ahead of anticipated component price increases.
A shortage of liquefied petroleum gas (LPG) also reportedly contributed to a 200–300% increase in demand for induction cooktops.
Despite the strong first-half performance, electronics growth is expected to moderate to 12–15% in the second half of 2026 as these factors ease.
India’s online retail industry is expected to experience another strong festive season. Redseer projects that online sales during the 30–35 days leading up to Diwali will grow approximately 25% year-on-year, reaching between $15 billion and $16 billion.
If achieved, this would represent the strongest festive-season growth in five years.
Grocery, BPC, home and furniture, and general merchandise are expected to sustain much of the momentum. During the pre-Diwali period, grocery sales could rise by 48–50%, BPC by 35–40%, and home and furniture by 32–35%.
Mobile phone sales, meanwhile, are projected to grow by only 5–7% during the same period.
Rising prices are expected to affect the contribution of mobile phones and electronics to festive-season spending. Redseer estimates that these two categories together will account for approximately 46% of festive GMV in 2026, compared with 51% previously.
The projected decline reflects subdued sales volumes as higher product prices make consumers more cautious about major purchases.
Overall, the outlook points to a gradual shift in India’s online retail market. Grocery, personal care, and home-related products are emerging as important growth engines, while smartphones and electronics face more moderate expansion. This diversification could reshape the country’s e-commerce landscape throughout 2026 and beyond.