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India’s Internet Economy To Hit $1 Trillion By 2030, Says RedSeer

RedSeer expects over 70 technology IPOs by 2025.

<div class="paragraphs"><p>A smartphone displays application icons [Photographer: Dhiraj Singh/Bloomberg]</p></div>
A smartphone displays application icons [Photographer: Dhiraj Singh/Bloomberg]

India’s internet economy, fuelled by growing internet penetration and consumption of digital content, is likely to touch $1 trillion by 2030, according to RedSeer.

The Indian digital economy is expanding at more than 50% every year, led by high-speed internet access and increased online shopping, the management consultant said in a report.

The report underscores the digital shift underway in the world's second-most populous nation. And it was accelerated by the pandemic as everything from work and education to shopping moved online. And yet, that also widened the gap for those at the bottom of the income pyramid.

About 40-50 crore people whose annual income is less than Rs 3.75 lakh ($5,000) “need digital intervention to help them solve their problems”, RedSeer said. This includes people living in rural and tier-2 cities and seen as the most important demographic to reach in the digital space.

Vernacular-first apps are able to reach this group and serve their needs, it said. “The need of the hour is deep vertical problem solving.”

India's new "digital revolution" is further enabled by growing technology adoption by the business-to-business segment. The software-as-a-service or SaaS market is expected to grow from Rs 26,341.2 crore ($3.5 billion) now to $8 billion by fiscal 2026, according to RedSeer. Technology firms are moving towards profitability or are already profitable.

The key digital economies of e-tail, e-health, food tech, online mobility, and bill pay and recharge that witnessed a downward trend due to Covid-19 induced restrictions have recovered well, augmented by its user base.

With as many as 55 companies that debuted on the Indian stock exchanges in 2021, RedSeer expects over 70 technology IPOs by 2025, driven by accelerated digitisation, government initiatives for startups, rising number of local investors with high equity, and private equity funding in tech companies.

“India’s journey to a $1 trillion consumer internet economy has been a unique story of multiple internet sectors such as e-tailing, e-health, food tech, online mobility, and quick commerce coming together to create a strong foundation for a consumption-led economy,” Anil Kumar, the CEO and founder of RedSeer, said.

The ongoing journey from digital-first to digital-forward was a result of multiple internet sectors having shown strong momentum post-Covid, he said.

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