Digital Adoption Is Unlocking A Trillion-Dollar Economy In India

McKinsey Global Institute said that for digital consumers, India was one of the fastest-growing and largest markets. In 2018, the country is reported to have 560 million internet subscribers, second only to China.

Although widescreen devices such as laptops or tablets are less favored in India, the nation’s mobile digital citizens are more active than any other country. While a Chinese consumes 5.5 GB of data each month, Indian use 8.3 GB per month on average, compared with 8-8.5 GB for a mobile user in South Korea. According to “Digital India- Technology to Transform a Connection Nation”, a report by McKinsey, India is digitizing fastest among 17 mature and emerging economies.

Mobile data consumption is growing at 152 percent annually – more than twice the rate in China. Decreasing data cost and the increase in smartphones are two contributing factors.

Private sector firms such as Reliance Jio has helped bring the costs down by more than 95 percent since 2013, from USD 12.45 to a few cents in 2017, making online usage accessible to even non-urban residents. More than 30 percent of Indians are using smartphones, and this rate is expected to double by 2020, equivalent to 829 million subscribers under the government’s digital campaigns. Additionally, high-speed penetration is becoming more popular with Indian internet users.

“Digital economy has plenty of room to grow in India”, McKinsey said. In 2018, just over 40 percent of the population has an Internet subscription, but India is already home to one of the largest and most rapidly growing digital consumer bases in the world. 280 million Facebook users are now spending 17 hours on the platform each week, more than the amount of both China and the United States’s.

Now accounting for 7 percent of GDP, India’s core digital sectors is estimated to contribute around USD 355 billion to USD 435 billion to the nation's GDP, or 8 to 10 percent the economy’s total productivity in 2025. IT-BPM, Electronics manufacturing, digital communication services, and accounting will all benefit from the growth. According to McKinsey’s report, the value-added contribution of digital economy could range from USD 205 billion to USD 250 billion for IT-BPM.