India has the second largest digital consumer base in the world with 1.2 billion mobile phone subscribers and 750 million internet users. The country has seen rapid transformation into a knowledge economy and a digitally empowered society with digitization driving affordable access, inclusion and new growth opportunities. We are seeing new, emerging technologies solving problems and unlocking massive value in essential sectors like financing, agriculture, healthcare, education and supply chains, among others. Digital technologies have helped create more transparency across value chains in multiple sectors, expanded markets, enhanced revenues and unlocked productivity, efficiency and savings. Government and industry estimates expect the digital economy to add over US$1 trillion in economic value, contributing over a fifth of overall economic activity by 2025. More than half of this is expected to come from new and emerging digital ecosystems. Additionally, over 60 million job opportunities are expected to be created on the back of India’s digital transformation.
India’s public digital infrastructure has become a critical building block to drive innovation and to support growth of startups, democratizing access to digital rails for young companies who would have limited resources. Aadhar’s seamless registration and identity confirmation, sees an average of 48 million daily authentication transactions and has now reached 1.3 billion accounts. The Unified Payments Interface (UPI) crossed the $1 trillion mark in transaction value for FY2022, adopted by businesses and even solopreneurs across the economic spectrum and driving economic transactions across sectors and use cases. It has now evolved into a core payment channel on top of which new applications are getting built for credit, savings, insurance and wealth creation. The Open Network for Digital Commerce (ONDC) allows all potential participants, including small and traditional retailers, to go digital and grow their businesses. The newly launched India Health Stack not only enables more seamless operations in healthcare service delivery but also creates a platform for new and innovative solutions to be built to address the needs of the sector. The Gati Shakti initiative, bringing together multiple government bodies on a single digital platform, will boost the infrastructure sector and unlock further positive impact on the economy.
Innovators are leveraging digital infrastructure and technology to solve problems across various segments of the economy. Digitization of supply chains helps to reduce inefficiencies, improve transparency, reduce logistics costs, and enhance the overall global competitiveness of Indian industries, especially small and medium enterprises. Moreover, it helps participants, particularly small manufacturers, and service providers, become more discoverable, allowing them to access new revenue opportunities that would not have been available earlier. This formalization also helps with accessing more affordable financing options that can further support growth. As the recent Covid-19 pandemic has demonstrated, digitally equipped supply chains have been able to better withstand disruption and mitigate potential economic losses. Digitization assumes even greater significance in the context of agricultural supply chains strengthening not just India’s food and nutrition security but also helping with the national objective of doubling farmers’ incomes by expanding markets and improving resource efficiency. Income enhancement for workers in the newly formalized, digitized sectors, through technology platforms and value chains, has ripple effects through the economy, driving consumption growth.
All of this digital innovation-led transformation not only unlocks economic opportunities for traditional businesses, MSMEs and small producers but also creates attractive opportunities for digital innovators and startups who are leveraging emerging technologies to create these transformative solutions. We have seen the education technology, or EdTech, sector now grow into a $2.8B market, poised to become a $10B market by 2025. Additionally, use of digital tools in the education sector has democratized access to learning opportunities and has, in turn, created a massive digitally skilled talent pool contributing to new technology solutions being built. Growth in IT services coupled with that of new digital startups working in emerging technologies like artificial intelligence, robotics, data analytics, automation, cloud, cybersecurity, blockchain, among others, is expected to add close to $250 billion in gross value by 2025. India now has the unique opportunity to be positioned as a global technology and innovation leader. Innovations in India, with applications for manufacturing, supply chains, health, education and finance have the potential to be built for the world, enabling the country’s digital innovation ecosystem to not only contribute towards India’s goal of becoming a $5 trillion economy but also establishing itself as a digital factory for the world.