India’s digital economy is projected to account for nearly 20% of the country’s GDP by fiscal year 2029-30, overtaking agriculture and manufacturing within six years. The sector contributed 11.74% to GDP in 2022-23, valued at INR 31.64 trillion($402bn), and has emerged as a key driver of economic growth, according to India’s Ministry of Electronics and Information Technology.

The ‘State of India’s Digital Economy Report 2024’ ranks the country as the third-largest globally in economy-wide digitalisation while placing twelfth among G20 nations in terms of individual user adoption. The sector employed 14.67mn workers in 2022-23, representing 2.55% of the workforce, and is nearly five times more productive than the broader economy.

Short-term expansion will be driven by digital platforms, intermediaries, and increasing adoption across traditional industries, reducing the dominance of ICT infrastructure in overall digital output. Digitalisation in banking, retail, and education has already added 2% to Gross Value Added (GVA), further strengthening the transformation.

Artificial intelligence (AI), cloud computing, and global capability centres (GCCs) are among the main catalysts for growth. India currently hosts 55% of the world’s GCCs, where multinational corporations conduct research and development, IT support, and business process outsourcing.

Employment in the digital sector is largely concentrated in digitally enabling industries, accounting for 58.07% of jobs. While the workforce remains male-dominated, digital platforms are creating more opportunities for women, particularly in sectors where safety and mobility have historically been concerns.

Retail is progressing towards an omnichannel model, with e-commerce firms investing in physical storefronts, while AI-powered chatbots and inventory management systems improve operational efficiency. In the banking sector, over 95% of transactions are digital, although revenue-generating services like lending and wealth management remain largely offline.

The education industry has widely adopted hybrid learning models, blending online and offline methodologies, while hospitality and logistics are integrating AI and metaverse technologies. Large firms in these sectors have fully digitalised operations, though smaller businesses are lagging.