India’s digital economy is expected to grow almost twice as fast as the overall economy, contributing nearly one-fifth of national income or gross domestic product (GDP) by 2030, according to the ministry of electronics and information technology (MeitY). In 2022-23, the digital economy accounted for 14.67 million workers or 2.55% of India’s estimated workforce.
The report "Estimation and Measurement of India's Digital Economy" further estimated that India’s digital economy will account for 11.74% of the national income in 2022-23 and it is and is likely to rise to 13.42% by 2024-25. The digital economy in 2022-23 was equivalent to Rs 31.64 lakh crore in GDP, it added.
The report noted that in less than six years, the share of the digital economy will become larger than that of agriculture or manufacturing in the country.
"In the short run, the highest growth is likely to come from the growth of digital intermediaries and platforms, followed by higher digital diffusion and digitalisation of the rest of the economy," the report noted.
While the traditional information and communications technology (ICT) sector remains the largest component of the digital economy, digital platforms and the digitalisation of brick-and-mortar sectors are growing rapidly, the report said.
Notably, it is the first of its kind report to quantify the value addition and employment generated by India’s burgeoning digital sector.
India's Digital Economy Landscape
India's digital economy is projected to surpass the $1trn mark by 2028, as per a forecast by Ask Capital. It said that factors like widespread 4G and 5G access, deepening mobile connectivity, and homegrown innovations such as the Unified Payments Interface (UPI) will bolster this growth.
Furthermore, the Indian Council for Research on International Economic Relations (ICRIER) also revealed that India’s digital prowess now outpaces that of several developed countries, including Japan, the UK, and Germany.
The increasing use of smartphones in the past few years has propelled cashless transactions and online purchases. Expanding broadband penetration will also deepen financial inclusion and boost new digital services.
The digital economy accounted for 4.5% of India's GDP in 2014.
