India's $1 trillion digital economy target by 2025 possible by improving digital business, fostering innovation

To capture India's $1 trillion digital opportunity by 2025, it is important to reduce operating costs, improve investments in digital businesses and foster innovation, according to a report released on February 20.

The report, India's Trillion Dollar Digital Opportunity, was released by the Ministry of Electronics and Information Technology (MeitY) done in collaboration with McKinsey & Company.

While India's digital economy currently stands at $200 million, the report states that the move from the “business-as-usual” onto the digital trajectory would create economic value of anywhere between $500 billion to $650 billion by 2025 towards the full potential scenario where the digital economy can create economic value of $1 trillion by 2025.

In addition, facilitating a booming open application program interface (API) ecosystem, supporting digital innovators through government procurement, and strengthening centres of higher education and innovation in new and emerging technologies like AI would further help in achieving the trillion dollar opportunity.

India has experienced large scale digital adoption between 2013 and 2018, buoyed by government initiatives, mobile penetration and digital adoption. During the stated time period, the country saw 1.22 billion Aadhaar registrations, 870 million Aadhaar-linked bank accounts and 98 million daily e-government transactions, up from 6.5 million such transactions.

Launching the report at the NASSCOM Technology Leadership Summit in Mumbai on February 20, Ravi Shankar Prasad, IT Minister, said, "Digital India is beyond IT."

"India has nearly half a billion internet users. This will create a huge market for a host of digital services, platforms, applications, content, and solutions," he said.

"Overall, India could potentially see a five-fold increase in economic value from digital transformation by 2025, representing an attractive opportunity for global and local businesses, start-ups, and innovators to invest in emerging technologies (like AI, blockchain, or drones) in ways that are customized to India’s needs,’’ he added.

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