/vnd/media/media_files/JABlZkGYk3hryePT3IOj.png)
The Indian economy has been digitalising at a remarkable pace over the last decade. Yet, there are no credible, up-to-date estimates of the contribution of the digital economy to national income and employment. Quantifying and understanding the role of the digital economy in driving economic growth, employment, and sustainable development is essential for both policymakers and the private sector.
Recognising this need, the Ministry of Electronics and Information Technology (MeitY) has released a comprehensive report titled Estimation and Measurement of India’s Digital Economy. This report aims to facilitate the alignment of resources and the adoption of appropriate growth strategies.
The cross-cutting and integrated nature of digital technologies makes defining and measuring a distinct digital economy a challenging task. Moreover, the conventional system of national accounts does not directly lend itself to measuring this new economy. This issue is not unique to India; few countries have attempted to quantify their digital economies, and even those efforts remain works in progress.
With the estimates presented in this report, India joins a handful of countries—and becomes the first among developing nations, to use the Organisation for Economic Co-operation and Development (OECD) framework to produce the most up-to-date estimate of the size of its digital economy. Additionally, the report provides alternative estimates using the input-output approach advocated by the Asian Development Bank (ADB). Beyond the OECD framework, the report also includes the digital contributions of traditional industries such as trade, banking, financial services, insurance (BFSI), and education.
India’s digital economy was estimated at 11.74% of national income in 2022–23. In absolute terms, this equates to INR 31.64 lakh crore (approximately USD 402 billion) in GDP.
The digital-enabling industry—which encompasses sectors such as information and communication-related services, telecommunications (traditionally referred to as the ICT sector), and the manufacturing of electronic components, computers, and communication equipment—is the largest contributor, accounting for 7.83% of GVA. New digital industries, including Big Tech companies, digital platforms and intermediaries, and firms reliant on digital intermediaries, account for nearly 2% of GVA. Meanwhile, the digital contributions of three traditional industries (BFSI, trade, and education), which fall outside the OECD framework but are included in these estimates, amount to 2% of national GVA. This contribution rivals that of the new digital industries, highlighting the steady diffusion of digitalisation beyond the ICT sector. It is evident that India’s digital economy is progressively extending across all sectors, driven by the proliferation of digital platforms and the digitalisation of traditional brick-and-mortar industries.
Share of India’s Digital Economy
Image credits: Ministry of Electronics & Information Technology
According to the projections in the report, India’s digital economy is expected to grow nearly twice as fast as the overall economy, contributing to almost one-fifth of national income by 2030 (see Figure 2). In the short term, the highest growth is anticipated to come from the expansion of digital intermediaries and platforms, followed by increased digital diffusion and the digitalisation of other sectors of the economy. In 2022–23, the digital economy accounted for 14.67 million workers, representing 2.55% of India’s estimated workforce.
Projected growth of India’s Digital Economy
Image credits: Ministry of Electronics & Information Technology
The estimates in the report are conservative due to the unavailability of data on (i) smaller digital platforms, (ii) the digitalisation of the informal sector, and (iii) the digitalisation of other traditional sectors, such as health and logistics, which are not included under new digital businesses.
This report represents an effort to compile the first set of credible, comprehensible, and current estimates of India’s digital economy, based on an internationally accepted framework. The insights provided in this report are invaluable for policymakers, businesses, and other stakeholders. Accurate data on the digital economy will facilitate more effective policy decisions, enabling targeted interventions and investments to support digital growth. For businesses, understanding the contribution of digital technologies to their sectors can help inform strategic decisions, drive innovation, and enhance competitiveness in a globalised market.