By 2025, the digital economy is expected to grow multi-fold backed by the services sector of the country and will be one-fifth of the total economy size.
India is poised to become a $1 trillion economy if it focuses on other sectors such as education, energy and others rather than just IT and electronics, a commerce ministry official said on Friday. By 2025, the digital economy is expected to grow multi-fold backed by the services sector of the country and will be one-fifth of the total economy size, Sangeeta Saxena, Director in the Indian Ministry of Commerce and Industry said, addressing an India-China business forum in Beijing. “With 560 million internet subscribers and the world’s second largest instant messaging service users after China, India has emerged as one of the three top digital economies of the world,” PTI reported her as saying.
Also, India has the Unique Identification Authority of India (UIDAI), which has a database of 1.2 billion people as Aadhaar, Sangeeta Saxena said. The government has realised that the potential of the services sector is overwhelming and has pegged the digital economy to touch one trillion of total economic value by 2025. Currently, this is at 4200-250 billion, it can go up to $ 500 billion if India does not leverage other sectors as well, she added.
While the digital economy focuses only on the IT and electronics sector as of now, it can also take into account sectors such as education, energy, financial, healthcare, logistics and transportation. With this, the digital economy can touch $1 trillion. This could also be an opportunity for business for local and global investors including neighbour China, which can invest in the emerging technologies. The digital economy will amount to 20% of the overall expected economy by 2025 which is pegged to grow to $5 trillion. “Of this, services sector constitutes about $3 trillion, Sangeeta Saxena said.
Need to tap the service sector
The service sector is the area which promises maximum potential and is awaiting exploitation. The sector constitutes more than 62% of the gross value added and more than 50% of FDI flowing into India is attracted by it.
India leads the software and service sector while China leads in manufacturing. Hence, India is entering into partnerships with many countries including China to diversify market to have synergies, she said.