Digital economy will contribute 20% of India’s $5 trillion economy by 2025, says report

indica News Bureau-

Emerging digital technologies are likely to generate $1 trillion in economic value for India, or as much as 20% of the $5 trillion nominal GDP often promised by Prime Minister Narendra Modi, by 2025, sustaining 60-65 million jobs, an EY report Monday said.

By 2025, India is expected to have 90% Internet penetration with 850 million users, the report added.

“India is at an inflection point—digital has changed the way people communicate, socialize, create, sell, shop and work. India is poised to be a game-changer in the world digital economy by empowering its citizens and revolutionizing businesses,” said Prashant Singhal, EY emerging markets TMT (technology, media and telecom) leader.

Digital technologies across sectors like retail, financial services, health care, energy, manufacturing and infrastructure will fuel the growth, resulting in employment generation and increased local and regional entrepreneurship and facilitate equitable socio-economic growth.

“Digital economy has the potential to sustain 60-65 million employment opportunities for women, differently abled people, skilled and semi-skilled workers across digitally enabled businesses in urban, semi-urban and rural areas,” the EY report said.

In the past four years, 268 mobile and mobile-component manufacturing units have been set up in India, generating 670,000 direct and indirect jobs under the government’s electronic manufacturing initiative.

Domestic electronics manufacturing could generate economic value of $100–130 billion by 2025, the report said.

India’s internet user base is expected to reach 627 million by the end of this year, second only to China’s, which is expected to reach about 850 million.

However, India’s internet penetration is at only 36%, indicating significant growth opportunities. Rural internet users are expected to increase by 2.5 times in comparison to urban internet users, providing a huge impetus for the next wave of growth.

The Indian e-commerce and consumer internet sectors are expected to reach $200 billion by 2027 and constitute a significant avenue to provide employment and build entrepreneurship in the country.

“In 2018, the sector raised over $7 billion in PE/VC capital (including venture debt) across approximately 200 deals, and seven companies reached the coveted unicorn status. 2019 has already seen five companies achieve unicorn status,” the findings showed. –IANS