It is such interest that has created several technology “unicorns” in India — or privately held start-ups worth $1 billion or more. The value of the online store Flipkart — whose backers include Tiger Global and the Russian billionaire Yuri Milner’s firm DST Global — rose to $11 billion from $3 billion in one year. The valuation of Snapdeal, a leading e-commerce site backed by SoftBank, rose to $2 billion from $350 million in 2014.

“No major market has multiplied at these rates in the history of this medium,” said Kunal Bahl, co-founder and chief executive of Snapdeal.

As investors rush in, the stampede has brought its own set of challenges. Despite the optimism, none of India’s e-commerce players are profitable yet. For now, it is a game of capturing market share, and the expenses are high as rivals try to distinguish themselves in front-page newspaper ads and prime-time TV commercials.

There is also the matter of the aggressive valuations that start-up founders are demanding. News reports this year suggested that a deal between Alibaba and Snapdeal fell through because the two could not agree on a valuation.

With such inflated prices, investors ought to be wary. Any downturn could take with it hundreds of millions of dollars of their money.

“Follow-on financing offers land even before entrepreneurs have closed the previous round. It is a little chaotic,” said Shailendra Singh, managing partner at Sequoia Capital in India, which has investments in the cab-summoning app Ola and the restaurant and food platform Zomato. Investors get sticker shock as entrepreneurs demand outrageous multiples and stiff premiums. Mr. Singh said some demands were “uncomfortably high.”

Still, the investor interest and money are being aggressively put to use by start-ups like Flipkart, which has tripled its number of employees in one year, to 33,000 as of March. It says it has averaged eight million shipments a month (compared with three million a year ago). It recently hired two Silicon Valley-based Google executives: Punit Soni, as its chief product officer, and Peeyush Ranjan, as its head of engineering. Both will be based in Bangalore, where Flipkart has leased 1.5 million square feet for its new campus in an office park backed by the Blackstone Group, the private equity firm.