A report by McKinsey & Company estimates that the internet services and devices industry has the potential of contributing up to 3.3 per cent to India?s gross domestic product (GDP) by 2015.
According to the consulting firm, the internet currently contributes 1.6 per cent to India?s GDP in line with most aspiring countries. This could grow to 2.8-3.3 per cent by 2015, provided India achieves its potential for growth in the number of internet users and internet technology related consumption and investment over this period. The internet?s contribution to the country?s GDP could increase from $30 billion in 2012 to about $100 billion in 2015.
As per the report, currently, India?s information and communication technology exports are the most significant component of the internet?s impact on GDP but private consumption and investment from the private and public sector have greater potential to grow in the future.
With a user base of 120 million, India is the world?s third largest internet market and is expected to have 370 million internet users in 2015. As of 2011, China has the largest internet user base in the world with 480 million users followed by the US with 245 million users. By 2015, China is expected to have 583 million internet users, while the US is expected to have 279 million users. The global internet user base is expected to grow from 2,300 million users in 2011 to 2,662 million by 2015.
McKinsey & Company says that given the current downward trends in the cost of internet access and mobile devices, India is on the verge of an internet boom. The country is likely to have the second largest user base in the world and largest in terms of incremental growth. However, the impact of the internet in India is constrained by the current infrastructure. While India scores well on availability of human and financial capital, it rates poorly on internet infrastructure, internet engagement, e-commerce platform, and the impact of e-governance.
As per the consulting firm, though the internet ecosystem is developing further in the country, the benefits of internet penetration have been relatively concentrated. India can benefit from further penetration of the internet by aiming for digital inclusion of nearly 40 per cent of its population to reach a user base of 500 million by 2015, rather than the likely target of 330-370 million internet users.
