According to a report by the Ministry of Electronics and Information Technology (MeitY) and the Indian Council for Research on International Economic Relations (ICRIER), the cloud market and global capability centres (GCC) are among the fast-growing segments of India’s digital economy which is expected to drive a fifth of national GDP by 2030.
The report noted India’s digital economy was equivalent to Rs 31.64 trillion in GDP in 2022-23. While the traditional ICT (Information and Communications Technology) sector remains the largest component of the digital economy, digital platforms and the digitalisation of brick-and-mortar sectors are growing rapidly. Meanwhile, the country’s cloud market, which accounted for 1.1-1.2 per cent of the global market in 2020-23, and GCCs were named some of the fastest-growing segments of the digital economy.
The report added that as companies increasingly adopt and integrate Al to optimise operations, boost productivity, enhance customer experiences, and introduce new services, the cloud market is projected to expand at a compound annual growth rate (CAGR) of 24 per cent from 2024 to 2027, to reach $20.3 billion by the end of 2027.
It noted that India has also become an international leader for GCCs, home to almost 55 per cent of the world’s GCCs in 2022. Among 22 of the top GCCs in India, nine are classified within the ICT sector, specifically computer-related services. GCCs are offshore centres established by multinational corporations to provide a variety of services to their parent organisations, including research and development (R&D), IT support, and business process management.
Going forward, the increasing share of the digital economy in gross value added (GVA) is likely to come from traditional industries adopting digital tools and practices. Among all sectors, the BFSI sector seems to be the most digitised, with nearly 20 per cent of the sectoral output coming from the digital side. However, while the digital share of transactions for banks is observed to be very high, the digital share of revenue is low, as some of the highest revenue-generating activities are largely offline.
Further, it added that e-tailers and e-sellers such as Nykaa, Urban Ladder, and FirstCry, which began as completely online models have, over time, invested in physical stores. Other traditional sectors that are now steadily transitioning to digital include education, hospitality, and logistics.
