Report: India's internet economy to hit $1 trillion by 2030

06 June 2023 3 min. read

India’s digital economy is expecting a six-fold increase in growth in the near future, and is set to hit a value of $1 trillion by 2030. This is according to a research report from Bain & Company in collaboration with Google and Temasek.

The joint study titled ‘e-Conomy India 2023’, denotes that digital services have become an indispensable part of the lives of over 700 million Indian users. Moreover, 350 million of them already engage in digital payments, while around 220 million use digital services for shopping.

India’s digital economy has been on a continuous upward trend over the past years, with the ever-increasing ecommerce sector one of the key drivers. Meanwhile, businesses are embracing digital channels as a way to do business and engage with their customers.

India’s internet economy is expected to reach $1T by 2030, double the value of IT services

The report estimates that India's internet economy was in the range of $155-175 billion in 2022, then accounting for roughly 50% of India’s technology sector and 5% of its GDP.

The analysis hints that the market will increase tremendously in the years up to 2030, suggesting that the overall value will be in the region of $1 trillion, which by then would account for 62% of the sector and over 12% of India’s GDP.

“Three foundational forces – deepening consumer digital adoption, technology investments by businesses, and digital democratization with the India Stack – has placed India at a turning point in its digital transformation," said Sanjay Gupta, the country head and vice president of Google India.

All sectors poised for exceptional growth, with e-commerce taking the lion’s share

Parijat Ghosh, Managing Partner at Bain & Company added: “India's internet economy has remarkable potential and is expected to grow at 6x over the next decade. The pace of digital disruption is expected to accelerate as businesses increase investments in digitization, in addition to startups continuing to play a strong role in driving the internet economy.”

The research suggests that the growth will be spearheaded by B2B ecommerce (business-to-business electronic commerce), which will grow 13-14 times to $105-120 billion, from around $8-9 billion last year. Meanwhile, the software-as-a-service segment is expected to grow 5-6 times to $65-75 billion by 2030, from $12-13 billion in 2022.

Digital financial services to see increasing digital share through the coming decades

The financial services sector will account for the lion’s share of growth. “Bolstered by the solid foundation of both adoption and innovation in digital financial services, online payments, lending and investments will continue to be a cornerstone of the internet economy, servicing the credit and capital needs of both the tier 2+ consumers as well as businesses,” said Ghosh.

Facing a promising outlook, investors will be keen to capitalize on the potential. Three in five investors expect deal activities to rise in the next two to three years, with most investors stating that over 75% of their funds’ allocation will be towards digital investments in the next five to seven years. Given the growing emphasis on profitability, growth and late-stage startups will receive more investor attention than earlier stage ones.