Mumbai, September 19 (Meel Bijendra) – The Indian economy received a significant boost with the acceptance of digitalization by intermediaries across the value chain (consumers, suppliers, wholesalers/distributors), supported by better internet infrastructure and connectivity.
India’s digital journey holds significant potential for growth, supported by the interest of large corporates to democratize data and serve stakeholders.
The Government of India has also encouraged digital inclusion at every level on a large scale. Prime Minister of India Narendra Modi launched 5G services in India on 1 October 2022 at the India Mobile Congress 2022 event and in the first phase, 5G services became available in 13 metropolitan cities of India.
The strong growth in India’s Internet economy is supported by several favorable policies and initiatives at the national level focused on digitalizing the economy.
Strengthening digital penetration: Recent years have seen a strong shift in focus towards developing Internet infrastructure as a core utility, facilitating the growth of Internet users in India and ensuring strong penetration in rural areas.
According to Bain & Company report, nearly two-thirds of Internet users (~400 million) are from rural India, and this number is expected to reach approximately 480 million by 2025. Additionally, 90% of rural India is already covered by 4G networks.
Government Initiatives: The Government of India has made dedicated long-term efforts and initiatives to improve affordability, accessibility, and connectivity across the country and these efforts are yielding positive results.
Various digital infrastructure projects like Aadhaar, DigiLocker, e-KYC, UPI, and RuPay have significantly accelerated digital adoption among the population. The government’s BharatNet Phase III initiative aims to connect rural India with digital infrastructure.
Launch of 4G/5G infrastructure: The launch of reliable, high-speed infrastructure with affordable data has contributed to the growth of digital networks across the country.
Currently, 60% of mobile users have access to 4G connectivity (doubling between 2017-2022), and there is a rapid roll-out of 5G infrastructure across the country to connect India with fast and reliable internet infrastructure.
More and more users are adopting the use of digital infrastructure due to better affordability of data. According to Bain & Company, an average Indian spends about 6.5 hours per day on the Internet, ahead of China’s average of 5.5 hours per day.
This indicates a strong engaged base, which is consuming content, digital shopping, social media at high levels.
According to the same report, digital payments were also adopted at a high level in India with 65 transactions per capita per year, which is higher than the global average of 25 transactions per capita per year.
Digitization of businesses: Businesses are increasingly adopting digital infrastructure to meet the growing needs of consumers. With over a billion people living in Tier 2+ cities, digital players have a significant opportunity to reach a larger base of potential customers.
The internet economy has experienced rapid growth in recent years, and this growth is expected to continue in the coming years, reaching a size of almost $1 trillion by 2030 (accounting for almost two-thirds of the technology sector), according to the Bain and Company report.