Speed of digital penetration at individual level needs to be stepped up

The State of India's Digital Economy Report 2025 says that India is the third largest digitised country in the world at an aggregate level

India’s expanding digital landscape has been one of the hallmarks of its growth story in recent years. Its digital economy is expected to grow almost twice as fast as the overall economy, contributing to nearly one-fifth of national income by 2029-30 from 11.74 per cent of GDP in 2022-23, according to the Ministry of Electronics and Information Technology (MeitY).

 

The State of India’s Digital Economy Report 2025 released recently by Indian Council for Research on International Economic Relations (ICRIER), says that India is the third largest digitised country in the world at an aggregate level.

 

However, the country ranks 28th out of a sample of 32 countries (19 countries from G20 countries plus other countries selected based on certain parameters) in digitalisation at a user level. 

 

“This means while India as a country has achieved a high level of digitalisation at the aggregate level, the level of digitalisation for the average Indian remains fairly modest,” the report says. According to the ICRIER report, India is the third largest digital economy with a score of 35.9 out of 100 at the economy level, trailing USA at 68.5 and China at 62.5. India has the world’s second largest mobile and internet network by number of users. It is also the global leader in terms of the volume of digital transactions and export of ICT services. All these factors have enabled India to attain a good score at an economic level.  But India’s score drops down to 33.6 at the user level which is below the score achieved by its peers. As many as 99 per cent of India’s population is covered by wireless internet as compared to universal internet connectivity for other countries. However, only 58 per cent of Indians have internet access as opposed to the median score of 93 per cent for other countries. This implies that over 40 per cent of Indians are not able to access the internet. Such a gap for other countries came out to be just 7 per cent (measured as a median). Further, only 49 per cent of Indians used a smartphone vis-à-vis the median value of 82 per cent for other sampled countries. Only 28 per cent of Indians were e-commerce users, significantly lower than the median value of 52 per cent for other countries. 

 

All these factors imply a slower diffusion of digital technologies in India. However, it offers an opportunity for India to expand the adoption of digital services, to generate more jobs and economic growth.