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India's Digital Economy Growth (2024–2030)
Context
India’s digital economy is expected to grow almost twice as fast as the overall economy, contributing nearly one-fifth of national income or gross domestic product (GDP) by 2030, according to the ministry of electronics and information technology (MeitY).
Key-highlights
- Current Situation (2022–2023)
- Share in National Income: India’s digital economy constituted 74% of the national income in 2022–2023.
- Gross Value Added (GVA): The digital economy in 2022–2023 was valued at approximately Rs 28.94 lakh crore (~USD 368 billion).
- GDP Contribution: It contributed around Rs 31.64 lakh crore (~USD 402 billion) to India’s GDP.
- Forecast for 2024–2025: The digital economy is expected to grow twice as fast as the rest of the national economy. It will rise to 13.42% of India’s national income by the end of 2024–2025, up from 11.74% in 2022–2023.
- Projection for 2030: By 2030, India’s digital economy will account for nearly 20% of the country’s overall GDP.
- Key Digital Economy Sectors
- ICT Sector: Information & Communications Technology (ICT) firms, telecom, and electronics manufacturing contribute the largest portion, making up 83% of national GVA.
- Big Tech & Online Intermediaries: These contribute 2% of national GVA.
- BFSI, Trade, & Education: Collectively, these sectors also contribute 2% to national GVA.
- E-Commerce and Digital-Only Services: E-Commerce and digital-only firms contribute a limited share of the digital economy:
- E-tailers contribute about 3% to GVA.
- However, BFSI digital activities contribute four times that amount.
Challenges to Digital India
While Digital India has made significant strides, it faces several key challenges:
- Digital Divide: Internet penetration is only 5%, leaving 675 million people unconnected, especially in rural areas. Additionally, 53% of rural households and 75% of urban households are dissatisfied with broadband speed.
- Digital Literacy: Around 40% of people aged 15+ haven't accessed the internet in the past year due to lack of awareness and affordability. This limits the ability of many citizens to benefit from digital services.
- Trade Barriers: Issues like data localization, restrictions on foreign satellite services, import curbs on IT hardware, and domestic production requirements pose barriers for foreign companies.
- Tariffs & Market Access: India applies high customs duties on ICT goods and has some of the highest tariffs within the G20, affecting competitiveness. Additionally, India’s public procurement policies prioritize local suppliers.
- Privacy and Data Security: As digital usage grows, concerns around data privacy and cybersecurity Despite the Personal Data Protection Bill, fears of data breaches and insufficient protection persist.
- Rising Cyber Threats:The integration of generative AI into various sectors has led to a surge in cyberattacks, with phishing incidents and credential phishing witnessing exponential increases since 2022, highlighting the growing sophistication of cyber threats.
Key Aspects of India's Digital Infrastructure
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