India's digital economy projected to reach $1 trillion by 2028
What's the story
India is on track to become a $1 trillion digital economy by 2028, according to a report by Ask Capital.
This growth is primarily driven by the country's rapid digital transformation and government initiatives such as UPI and 5G technology.
These advancements are promoting financial inclusion and enhancing digital services across various sectors including healthcare, education, and e-commerce.
Digital transformation
India's digital prowess surpasses developed nations
The Indian Council for Research on International Economic Relations (ICRIER) has noted that India's digital prowess now surpasses that of several developed countries, including Japan, the UK, and Germany.
This is largely due to the widespread use of smartphones and a shift toward cashless transactions and online purchases.
Government schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY) and Direct Benefit Transfer (DBT) have also played a significant role in promoting universal access to financial services.
Tech adoption
Telecom and internet usage fuel India's digital economy
Data from the Telecom Regulatory Authority of India (TRAI) shows that as of March 2024, India had nearly 1.2 billion telecom subscribers and the total number of internet users rose from 881 million in March 2023 to 954 million by the end of March 2024.
The adoption of advanced technologies like 4G and 5G has led to a significant increase in wireless data usage, further fueling the growth of India's digital economy.
Economic impact
Digital economy's contribution to India's GDP
The digital economy, which accounted for 4.5% of India's GDP in 2014, is projected to contribute 20% by 2026.
Between 2017 and 2023, retail digital payments saw a significant increase of over 50%.
Sectors such as finance, education, healthcare, food, travel and e-commerce are already experiencing large-scale digital transformation.
The report also predicts that UPI will account for nearly all retail digital payments in India by 2027.
Sectoral growth
Digital initiatives boost healthcare and education sectors
Digital India initiatives have significantly benefited sectors like healthcare and education.
The Ayushman Bharat Digital Mission (ABDM) is developing an integrated digital health infrastructure for the country, while e-Hospital and e-Sanjeevani are making healthcare facilities more accessible.
The COVID-19 pandemic has also accelerated the shift toward online education, further driving the growth of India's digital economy.