Indian fintech industry projected to reach $420 billion by 2029, says NPCI’s Ajay Kumar Choudhary

As of 2024, the Indian fintech industry is estimated to be around $110 billion, Ajay Kumar Choudhary said

The Indian fintech industry is poised for tremendous growth, with projections estimating it will reach $420 billion by 2029, said Ajay Kumar Choudhary, Non-Executive Chairman and Independent Director at the National Payments Corporation of India (NPCI).

“As of 2024, the Indian fintech industry is estimated to be around $110 billion, and by 2029, it is projected to reach an impressive number of around $420 billion at a cumulative annual growth rate of 31 percent,” Choudhary told reporters on the sidelines of an event held in New Delhi.

Boasting over 9,000 fintech entities, India ranks third globally in terms of the highest number of fintech entities and commands 14 percent of start-up funding in the country, the director said, adding that the adoption rate of fintech in India is 87 percent, which is much above the global average of 67 percent.

Choudhary highlighted several factors contributing to the rapid growth of India’s fintech sector, including favourable government policies, the development of enabling digital public infrastructures (DPIs), institutional support, and technological innovations.

“The Indian fintech ecosystem is expected to continue to proliferate,” Choudhary said, adding, “NPCI has also set an ambitious target of achieving 1 billion UPI transactions per day in the coming years.”

While the fintech industry’s growth is driven by technology-linked innovation, Choudhary emphasised the need to address associated risks and vulnerabilities.

He highlighted the necessity for adequate IT investments by banks and fintech entities to meet the evolving challenges of digitalization.

“These innovations have come with their own set of risks and can create new vulnerabilities and amplify existing risks,” he said. “The sector would have to focus on two key elements, viz. customer centricity and governance.”

‘Finternet’ success

On the adoption of the proposed concept — Finternet -- the NPCI Director said its successful adoption could boost economies by 2-3 percent. "The potential of any economy, including India, could go up by 2-3 percent if Finternet is adopted," he said.

The concept of Finternet was proposed by Infosys Co-founder Nandan Nilekani and Agustin Carstens, Director General of the Bank of International Settlements (BIS) through a recent working paper of BIS. The idea is to lower barriers between different financial services and systems, drastically reducing the complex clearing and messaging chains and other frictions that hinder today’s financial system.

“It’s an interesting concept and authorities are excited and ready to work on this,” he added.