SME Futures Editorial
India’s digital economy has witnessed a meteoric rise over the last decade, becoming a significant driver of growth, employment, and innovation. According to the State of India’s Digital Economy Report 2024, India ranks as the third most digitalised country in the world in terms of overall economy-wide digitalisation and 12th among G20 nations for individual digital adoption.
By 2029-30, the digital economy is projected to contribute nearly 20 per cent of the national GDP, surpassing traditional sectors like agriculture and manufacturing. This growth is being fuelled by AI, cloud computing, and the rapid expansion of Global Capability Centers (GCCs)—India now hosts 55 per cent of the world’s GCCs, making it a global tech powerhouse.
The impact of digitalisation varies across industries, with some sectors embracing transformation faster than others:
– BFSI (Banking, Financial Services & Insurance): Over 95 per cent of payment transactions are digital, yet key revenue-generating services like loans and investments remain primarily offline.
– Retail: Omni-channel models are on the rise, blending physical stores with e-commerce platforms. AI-powered chatbots and digital inventory tools are improving efficiency.
– Education: A mix of offline, online, and hybrid learning models is becoming the norm, with hybrid education gaining the most traction.
– Hospitality & Logistics: AI, metaverse, and digital automation are transforming operations, with large firms leading the charge while smaller businesses struggle to keep pace.
The digital economy contributed INR 31.64 lakh crore ($402 billion) in 2022-23, accounting for 11.74 per cent of GDP and employing 14.67 million workers. Interestingly, jobs in the digital economy are five times more productive than the rest of the workforce. Digital platforms have also boosted employment opportunities for women, breaking traditional mobility and safety barriers.
With digital platforms growing at an estimated 30 per cent annually, India’s digital economy is on track to be a global leader. The focus now shifts to bridging digital gaps across industries, enhancing AI-driven automation, and ensuring sustainable digital infrastructure to maintain this upward trajectory.
By 2030, India’s economy will look vastly different—one where digital services, AI-driven industries, and tech-driven innovation take center stage, defining the country’s next era of economic dominance.
