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India Ranks 28th in Digital User Economy: Report

Why in the News?

A report by ICRIER and CIDE reveals that despite being the world’s third-largest economy, India’s digital user economy ranks 28th. The study highlights low user spending, digital adoption gaps, and the need for increased investments to boost digital penetration.

Current Status of India’s Digital Economy:

• India ranks as the third-largest economy globally, but its digital user economy stands at 28th place, according to a report by the Indian Council for Research on International Economic Relations (ICRIER) and Prosus Centre for Internet and Digital Economy (CIDE).
• Despite achieving high levels of digitalization at the national level, the average Indian’s digital adoption remains modest in terms of spending and usage.
• Internet penetration in India is comparable to global standards, yet user spending in the digital economy lags behind its overall economic scale.

Key Challenges in Digital Adoption:

• A significant disparity exists between digital infrastructure and user spending, indicating that digital adoption has not translated into widespread financial participation.
• Factors like access quality and AI readiness influence India’s overall digital economy ranking.
• The CHIPS framework, used in the study, evaluates India’s position by considering various digital parameters, placing it eighth when combining digital and overall economic rankings.

Future Potential and Growth Prospects:

• India’s digital economy is growing at twice the pace of its overall economy.
• By 2029, the digital economy is expected to contribute one-fifth of India’s GDP, highlighting immense growth potential.
• The report emphasizes the need for increased investments in digital infrastructure to boost digital penetration and user participation.
• Government and private sector initiatives can bridge the gap, ensuring a more inclusive and high-spending digital user economy.