India's app ecosystem could be worth Rs 2,000 cr by 2016: report

The report by ICRIER and Internet & Mobile Association of India estimates that it will also result in an increase in total employment by up to 8 times

India’s booming application ecosystem could generate employment to the tune of 151,230 to 159,010 over the next one year, says a new study.

According to a report by think tank Indian Council for Research on International Economic Relations (ICRIER) and Internet & Mobile Association of India (IAMAI), indirect and induced effects could result in an increase in total employment by up to eight times during 2014 to 2016. This puts the size of India’s app economy at Rs 1,964 crore in 2016.

Rajat Kathuria, director and chief executive, ICRIER, said, “The increase in start-ups coupled with an enhanced ecosystem could create employment opportunities. At present, the app economy has created about 75,000 direct jobs, and has the potential to reach 600,000 over a period of time due to indirect and induced impacts of app development.”

According to the report, the country is experiencing 100 million downloads per month even though smartphone penetration  is estimated at less than 20 per cent currently. Despite this, India is among the top five regions for Google Play, the official Android app store. The number of 3G sim cards in India is also expected to jump from 35 million in 2012 to 272 million by 2017. India also contributes significantly to app development as roughly ten per cent of apps worldwide are developed by Indians, either based abroad or at home.

Subho Ray, president, IAMAI, said, “India’s app economy is at the cusp of an exponential growth. With e-tailers going mobile only and unprecedented growth in the hyperlocal segment, the sector will not be surprised to witness a faster growth than projected in the report.”

R Chandrasekhar, president - NASSCOM highlighted the fact that despite its promise, the challenge is to create a conducive ecosystem for application development and usage. "Harmonious commercial synergies between app developers and telecom operators have to be created. App development coupled with infrastructure development will lead to the growth of the app economy,” he added.

Some basic requirements for this ecosystem to thrive include less regulatory intervention, high smartphone penetration and data usage along with government providing digital infrastructure which can enable demand.