According to a new report by The Boston Consulting Group, which is part of the Connected World series, India’s internet economy contributed Rs. 3.2 trillion to the overall economy in 2010, representing 4.1 percent of GDP. The report projected that this will rise to Rs. 10.8 trillion by 2016.
The report further says that if the Internet were a sector, it would be the 8th largest in India - larger than mining and utilities. It is driven especially by exports of IT services (net exports make up 59% of the Indian internet economy, while consumption is only 20 percent).
India's internet economy growth rate of 23% places it as the 2nd fastest among 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.
Speaking about the results that came out of the report, Arvind Subramanian, a Mumbai-based BCG partner said, “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 and India in services - which propel their internet economy rankings toward the top of the chart.” He further added, “In emerging countries like India, social media are fast becoming the internet medium and mobile the access medium of choice.”
Commenting on the report, Rajan Anandan, VP - Sales and Operations & Managing Director, Google India, said, "India is seeing one of the fastest rates of internet adoption across the globe. It is up to all of us - users, businesses and the government - to leverage the potential of the internet to deliver value and wealth."