In a general patriotic sense, it’s easy to be proud of India's recent policy shift toward favouring Indian-origin e-commerce: “Buy Indian” seems like a simple solution to complex economic concerns. But underneath the catchphrase, used through initiatives like ONDC and draft e-commerce rules that encourage visibility of domestic products, is a knot of negotiations that deserve sober attention. Any policy that supports regional supply chains, small retailers, and entrepreneurs is welcome, but when protective speech turns into law that modifies consumer choice, impacts market incentives, and lessens the competitive pressure that encourages innovation, it makes me worry. The question isn’t whether the state should promote local brands; it is how to do so without sacrificing long-term sufficiency, competitiveness, and consumer welfare. Fairness and inclusivity have been highlighted in the government’s narrative. By enabling sellers, buyers, and service providers to communicate via an open protocol rather than being restricted to a small number of marketplaces, the Open Network for Digital Commerce, which is presented as a digital public product, promises to open up online retail. This is an attractive ideal: reduce gatekeeping by dominant platforms, lower entry costs, and route demand fairly to micro, small and medium enterprises. Official communication has framed ONDC as a corrective to marketplace concentration rather than a replacement for established brands. However, a kind of economic nationalism that filters, discoverability guidelines, and policy nudges that specifically favour Indian-origin listings has become more prevalent in the political discourse, which begins to resemble tilting rather than levelling the playing field.
We must examine what has actually transpired in the market over the past two years to determine whether this tilt will be beneficial or harmful. Throughout 2023 and 2024, well-known international platforms, mostly Amazon and Flipkart—owned by Walmart, kept controlling the majority of the horizontal online retail market share thanks to extensive logistics networks, huge seller bases and aggressive discounting tactics. An estimate of FY2023 puts Flipkart in the highest 40s (per cent share of e-commerce gross product value) and Amazon in the 30s, leaving limited room for rivals. On the contrary, several quick-commerce companies like Zepto and Blinkit, as well as Indian multinational companies and startups like Reliance (jioMart), Tata Group (Tata CLiQ, Tata Digital) and others have been racing to increase their digital footprints, often with the support of substantial funding and integration with massive offline retail networks. As a result, the competitive landscape is changing quickly with nimble local players and national champions invading areas that have historically been dominated by foreign-owned marketplaces.
A short case study helps demonstrate the conflict between propaganda and the truth. In 2024, quick commerce—ultra-fast grocery and convenience delivery exploded, accounting for a significant portion of e-grocery orders and garnering enormous funding and consumer adoption. Domestic startups like Zepto saw rapid expansion (reported market share gains from mid-teens to nearly a third in certain months), while established players (including Flipkart and Amazon) responded by building micro-fulfilment centres and partnerships to defend their territory. Policymakers cheered the rise of local firms, and the optics of a domestic success story fit nearly into the economic-nationalist script. But the financial realities of rapid trading are cruel: unit economies remain weak, margins thin and international scaling expensive. If restrictive rules shelter young Indian businesses from foreign competition but don’t address underlying viability and efficiency issues, India could end up with a fractured, less-innovative ecosystem propped up by regulatory fences rather than strong competitiveness.
A second, related lesson can be learned from Reliance Retail’s aggressive expansion. Reliance’s retail goals, which happen offline and online through JioMart, demonstrate how domestic capital can, and does, expand rapidly when given both competition and supportive policy environments. Reliance has built out hidden stores and thousands of physical outlets to create a multichannel advantage that foreign platforms can’t easily replace. That capability matters: local leaders who combine supply chain depth with online platforms may genuinely expand choice and lower costs for lots of customers, while also boosting Indian control over data and commerce flows. But the risk of concentration remains: if policy rewards large local multinationals without checks, new forms of supremacy can develop; overseas control is displaced, not dispersed, causing the same concerns about market power, supplier contraction and reduced innovation.
Where should policy end up, then? Initially, promote domestic firms but insist on competitive discipline. The public sector, like ONDC, should reduce entry costs and enforce connectivity, but it shouldn’t act as a sheltered market. To stop gaming and maintain consumer confidence, open networks need to be supported by rules, settling disputes, and transparent metrics. Secondly, encourage discoverability of local products without imposing restrictive filters that artificially restrict consumer options. While information and optional “Made In India” highlighting are helpful, mandatory localisation regulations are not. Thirdly, pair promotion with capability building: investments in logistics, warehousing, skills and credit for MSMEs will yield more durable regional leaders than short-term bribes. Finally, monitor market share not just by ownership ethnicity but by market influence: who is setting prices, limiting vendors, and dictating terms? In e-commerce, economic nationalism is not always a bad thing. Building national online networks, supporting MSMEs and promoting domestic brands are all commendable objectives. My main concern is that a policy framed as patriotic can become restrictive in ways that replace argumentation with a greater challenge of raising rivalry. The long game should be capability and not shelter. If India’s leaders can combine democratic facilities with favourable regulation and real operational help for local sellers, the country can realise both its political objectives and economic ones. If not, we risk trading one centralised ecosystem for another, with all the same negatives, including less choice, slower growth and weaker incentives to improve.
I want to see the Indian commerce industry succeed on its own in terms of global competitiveness, homegrown and innovative. But patriotism is not a replacement for policy design that respects consumers, fosters competition, and builds skills. Let’s promote Indian brands with clear eyes: encourage them, but don’t defend them from the pressure that makes corporations truly world-class.
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