According to a report released by Google, Temasek, and Bain & Company titled “The e-Conomy of a Billion Connected Indians,” India’s Internet economy is expected to increase from US$ 175 billion in 2022 to US$ 1 trillion by 2030.
The report, which was based on investor and consumer surveys, stated that digital consumption is fuelling growth in important Internet economy sectors like e-commerce, online travel, food delivery, and ride-hailing.
The share of the Internet economy in India’s technology sector will increase from 48% in 2022 to 62% in 2030. Further, it was claimed that it will also make up 12-13% of India’s GDP, up from 4-5% in 2022. It ascribed the rise in the internet economy to India Stack’s success, increased digital demand in tier 2+ cities, and the digitization of conventional enterprises.
In the upcoming years, expansion of the digital economy will also increase India’s appeal as a place to invest. Three out of five investors, according to the study, anticipate an increase in deal activity in India during the next 2-3 years.
The majority of investors also stated that, over the next 5-7 years, they intend to devote more than 75% of their capital to digital investments. Investors are most interested in software-as-a-service (SaaS), fintech, and B2C/B2B e-commerce sectors, according to the report.
The report also stated that the doubling of household incomes from roughly US$ 2,500 to US$ 5,500 by 2030 will be the main driver of this growth in the internet economy.
The sector with the biggest growth rate of 9-15 times is predicted to be health tech and insurance tech, which is now valued at less than US$ 2 billion. SaaS will continue to be the main driver of India’s digital exports, but the report also predicted that domestic edtech and e-commerce platforms would gain more global traction.