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Core digital sectors to contribute 10% to India’s GDP by 2025

Core digital sectors in India have the potential to contribute up to 8-10% to the country’s GDP by 2025, says a recent report.

These core digital sectors include information technology-business process management (IT-BPM), digital communications, and electronics manufacturing.

The report said that currently, these core digital sectors account for about US $170 billion or 7% of the country’s GDP (2017-2018). Out of this, US $115 billion is from IT-BPM, US $45 billion from digital communications, and US $10 billion from electronics manufacturing.

In India, data costs have fallen by 95% since 2013, and this is expected to increase the number of smartphone users by about 40% and double the number of smartphones by 2023.

The report also predicts that core digital sectors will increase two-fold to US $355-435 billion by 2025.

The report said that India is one of the largest and fastest-growing markets for digital consumers, with 560 million Internet subscribers in 2018, just behind China.

Indian mobile data users consume 8.3GB (gigabits) of data each month on average, compared with 5.5 GB for mobile users in China and 8-8.5 GB in South Korea.

The public sector has been a strong catalyst for India’s rapid digitisation and so has private sector innovation. Internet-enabled services are now more accessible to millions of consumers.

In recent years, India’s Internet user base has grown rapidly as a result of the decreasing cost and increasing availability of smartphones and high-speed connectivity. It is now one of the largest in the world.

Also, as reported earlier, India’s digital energy consumption is set to increase by 16% every year through 2023, twice the world average growth rate. This upsurge in energy consumption has been attributed to the production and adoption of digital technologies, specifically smartphones.

When Digital India was launched, one of its main objectives was to transform India into an electronics manufacturing hub, targeting net-zero imports by 2020.

India’s Union Cabinet gave its approval to an extension of the Modified Special Incentive Package Scheme (M-SIPS) in 2015, which provided subsidy amounting to 20% for investments made in special economic zones (SEZs) and 25% for investments in non-SEZs.

By February of last year, 322 applications had been received, out of which 148 applications had been approved. Under the Electronic Manufacturing Cluster (EMC) Scheme in 2018, the Ministry of Electronics and IT received 50 applications, out of which it had approved 20 greenfield EMCs and three common facility centres (CFCs).

The Government also set up an Electronics Development Fund to provide risk capital for start-ups planning to develop new technology in electronics, nano-electronics, and other information technologies.

As a result of Government initiatives, India now has 120 units manufacturing mobile phones compared to 2 units in 2014. Around 225 million mobile handsets were manufactured in India in 2017-2018 compared to 60 million in 2014-2015. The industry has generated employment for over 450,000 people.

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