By many measures, India is well on its way to becoming a digitally sufficient country. India is already home to one of the world’s largest and fastest-growing bases of digital consumers.
Global and local digital businesses can see the opportunity in India and are creating hundreds of services. For instance, Media companies are making content available in India’s 22 official languages. Likewise, India had 560 million internet subscribers in September 2018, second only to China. Moreover, Indians download more apps—12.3 billion in 2018. The share of Indian adults with at least one digital financial account has more than doubled since 2011.
PUBLIC AND THE PRIVATE SECTOR
The public sector has been a strong supporter of India’s rapid digitization. Although, government’s efforts to introduce Aadhaar has played a major role. Aadhaar has enrolled 1.2 billion people since it was introduced in 2009. Likewise, making it the single largest digital ID program in the world. Above all, the Goods and Services Tax Network, established in 2013, brings all transactions of about 10.3 million indirect tax-paying businesses onto one digital platform. Which creates a powerful incentive for businesses to digitize their operations.
At the same time, private sector improvement has helped to bring internet-enabled services to millions of consumers. Like, Reliance Jio’s strategy of bundling virtually free smartphones with mobile-service subscriptions has introduced innovation and competitive pricing. Data costs have boosted by more than 95% since 2013 and fixed-line download speeds increased between 2014 and 2017. As a result, mobile data consumption per user grew by 152% annually—more than twice the rates in the United States and China.
“The trillion-dollar economy report is the symbol of opportunity that India offers,”
– said Ravi Shankar Prasad, minister of information technology.
Currently, India’s digital economy generates about $200 billion of economic value annually. 8 per cent of India’s GVA, largely from including:
- Information technology and business process management (IT-BPM)
- Digital communication services (including telecom)
- Domestic electronics manufacturing
- Digital payments
- Direct subsidy transfers
The potential for a fivefold increase in economic value from India’s digital transformation by 2025 would create a rapidly growing market. This provides an attractive opportunity for global and local businesses, start-ups, and platform-based innovators who will be investing in emerging technologies customised to India’s needs.
POST COVID IMPACT
The COVID-19 pandemic will speed up India’s digital adoption as a large number of people shop online and local businesses are adopting digital transformation. Morgan Stanley made the statement in its 53-page report called, ‘India’s Digital Economy in a Post-COVID-19 World’. However, the leading global investment bank and wealth management firm credited Reliance Jio’s 4G telecom services for digging the country’s digital economy.
Morgan Stanley said COVID-19 has relieved something relating to digital transactions. “We believe COVID-19 could accelerate the shift to online transactions and provide growth in India’s digital economy. Stating that a larger increase in its online shopping base needs to grow in its digital economy and COVID-19 has the potential to do just that“.
The analyst said in a post-COVID-19 world, “India’s online shopping population could see a sharp increase, online penetration in grocery could finally inflect as e-commerce and new entrants make a bigger push in this category, digitization of small and medium business (SMB) enterprises could take centre-stage (and) investments in segments such as gaming, edtech, health tech, and cloud could increase.”Stating that India could see the emergence of some large tech companies in the next 5-10 years, Morgan Stanley said Amazon and Flipkart, amongst the e-commerce companies, and Paytm and PhonePe, amongst the digital payment companies, have been trying to build several offerings on their platforms.
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