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The Indian internet economy is projected to touch Rs 10.8 trillion by 2016, according to a report in the The Boston Consulting Group’s Connected World Series study. The report ‘The $4.2 trillion Opportunity: The Internet Economy in G-20’, further notes that if the internet were a sector, it would be the eighth largest in India. The report highlights that Indian internet economy that contributed Rs 3.2 trillion to the overall economy in 2010 represents 4.1 % of the gross domestic product.
India’s internet economy growth rate of 23 % makes it the second fastest across the G-20 countries and ahead of many other developing nations in the G-20, which are growing at an average of 17.8 %. Projected growth rates elsewhere are: 24.3 % in Argentina, 18.3 % in Russia and 15.6 % in Mexico. In 2010, developed markets contributed 76 % of the G-20’s internet economy; by 2016 that will fall to 66 %. The report also highlights how internet has become an integral part of consumers’ everyday life
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“Consumption is the principal driver of internet GDP in most countries, typically representing more than 50 % of the total in 2010. It will remain the largest single driver through 2016. China and India stand out for their enormous internet related exports — China in goods, India in services — which propel their internet-economy rankings toward the top of the chart,” said Arvind Subramanian, a Mumbai-based BCG partner.
He said, “In emerging countries like India, social media is fast becoming the internet medium and mobile the access medium of choice.”
The report further stated that the internet economy in the developed markets of the G-20 will grow at an annual rate of 8 % over the next five years, far outpacing just about every traditional economic sector, producing both wealth and jobs. The contribution to GDP will rise to 5.7 % in the EU and 5.3 % for the G-20. Growth rates will be more than twice as fast — an average annual rate of 18 % — in developing markets, some of which are banking on digital future with big investments in broadband infrastructure. The economy by 2016 will also employ 32 million more people than it does today.
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