India has the world’s second-largest consumer base when it comes to digital content. It is also the second-fastest among the 20 fastest growing economies around the world. Which is why it is important to emphasise that fact that this user base is going to be the cornerstone upon which India builds its digital economy and social empowerment; a future that’s backed by next-generation technologies like Artificial Intelligence (AI), Internet of Things (IoT) and industrial automation. The Digital Economy could very well be the enabler that helps India achieve its dream of a USD 5 Trillion Economy in the near future.
Dotting the I’s and crossing the T’s
The Government of India recently introduced the National Policy on Electronics (NPE) and the National Policy on Software Products (NPSP). These policies were devised with an eye on empowering the country’s digital economy. These have clear strategies to empower domestic entrepreneurs and encourage Make in India, safeguard interests of the consumers, ensure creation of jobs in the digital sphere in the times to come, promote domestic research and development in digital innovation and prevent misuse of data while maintaining the spirit of existing regulations.
Digital businesses, tech manufacturing and R&D ecosystems are being put together to complement the efforts that are already in the pipeline to improve the digital infrastructure. The intent was clear in the recent Union Budget that called for additional investments in digital infrastructure while making digital transactions more lucrative, convenient and secure. Owing to the talent pool that’s available in India, talented technologists can look at developing the local digital platforms that make the most of this unprecedented opportunity.
Contribution to the national GDP
As of now, our country’s digital sector generates approximately $200 billion of economic value every year. This is roughly 8 percent of India’s Gross Value Added (GVA) in FY 2017-18 and it largely comes from the IT sector, communication services, e-commerce, domestic electronics manufacturing, and online payments.
Developing our digital infrastructure can increase productivity, promote savings and drive efficiency across core sectors like agriculture, education, energy, healthcare, logistics, manufacturing and trade. It is also important to mention that our e-commerce market grew to $35 billion in 2018, and as much as two-thirds of that growth came from the rural parts of India. Which reiterates the fact that the key to the development of our country lies in the rural areas.
What lies in store?
According to a report by the Ministry of Electronics and Information Technology, by 2025, the digital economy can contribute to more than $1 trillion of economic value, with almost half of the revenue being generated by the new ecosystems that could pop-up in the upcoming years. This could be equal to 22-23 percent of our GDP.
Ravi Shankar Prasad, Minister of Information and Technology, made a recent statement that reaffirms the government’s stance on the future of the digital economy “A trillion-dollar economy is the symbol of opportunity that India offers to the world. It’s a chance for organisations in the digital space to invest and do business in India. The size and scale that India offers is a golden business opportunity for global companies.”