Internet economy to become 12–13% of GDP by 2030: Report

TitledIndia e-Conomy Report, the research states that India is in its ‘Digital Decade’ and its internet economy will grow to 12-13% of its GDP by the end of the decade from the current 4-5%

June 06, 2023 03:42 pm | Updated 08:13 pm IST - New Delhi

A vendor is seen displaying several payment modes — a testament to India’s growing digital economy. Representative image

A vendor is seen displaying several payment modes — a testament to India’s growing digital economy. Representative image | Photo Credit: The Hindu

India’s internet economy — B2C e-commerce firms, online service providers, ed-tech companies, and so on — will hit $1 trillion in value by 2030, up from $175 billion in 2022, a report by Google, Bain & Company and Temasek estimated. “The e-Conomy of a Billion Connected Indians,” released by the three firms on June 6, said that the growth would be driven by more Indians starting to transact online and the growth of digital businesses overall.

The key thrust would come from “Tier 2+ locations,” the report said, emphasising smaller towns and rural areas, where the changes were expected to be most pronounced in their impact on the value of the internet economy, as only 13% of Indians live in metro and tier 1 cities.

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“... the contribution of the internet economy to India’s technology sector is set to expand, from the present 48% to 62% in 2030,” the report said. Simultaneously, the internet economy will go from contributing 4–5% to the Gross Domestic Product to more than double that number, nearly 12–13%.

“HealthTech and InsurTech, both currently sized at or less than $2 billion today, will demonstrate the largest expansion, to the tune of 9–15x,” a press release accompanying the report said. “SaaS [Software as a Service] will continue to drive momentum for India’s digital exports, with edtech and e-commerce offerings getting a global footprint.”

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In this period, investors may well turn to established startups, eyeing a return on their investment instead of scattering seed investments for early stage firms. “Given the growing emphasis on profitability, growth and late-stage startups will receive more investor attention than earlier stage ones,” the press release said.

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