June 7, 2023
The contribution of the Internet economy to India's technology sector is expected to increase from 48% in 2022 to 62% by 2030
The Internet economy will account for 12-13% of India's GDP by 2030
Factors contributing to the surge in the Internet economy include rising digital demand in tier 2+ cities, the digitization of traditional businesses, and the success of India Stack
B2C e-commerce is projected to drive 40% of the digital GMV, followed by B2B sectors and SaaS
India’s internet economy is projected to reach $1 trillion by 2030, showing substantial growth from $175 billion in 2022, as per a joint report by Google, Temasek, and Bain & Company. The report highlights that the expansion of the digital sphere is propelled by increased digital consumption in sectors like e-commerce, online travel, food delivery, and ride-hailing.
By 2030, the Internet economy is expected to contribute 62% to India’s technology sector, a notable increase from 48% in 2022. Furthermore, as stated in the report, it is anticipated to account for 12-13% of India’s GDP, up from 4-5% in 2022. The surge in the Internet economy is attributed to several factors, including the growing digital demand in tier 2+ cities, the digitization of traditional businesses, and the success of India Stack. B2C e-commerce is projected to drive 40% of the digital gross merchandise value (GMV), followed by B2B sectors and Software as a Service (SaaS). The report emphasizes the importance for traditional businesses and micro, small, and medium enterprises (MSMEs) to increase their investments in digitization and adopt new business models to cater to tech-savvy consumers.
The growth of the digital economy is also anticipated to enhance India’s attractiveness as an investment destination in the coming years. The report reveals that three out of five investors expect increased deal activity in India within the next two to three years. Additionally, a majority of investors have expressed their intention to allocate over 75% of their funds to digital investments in the next five to seven years.