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India’s internet economy to grow 500% in 7 years
The big bang internet economy leap
A recent report, jointly authored by Google, Bain and Temasek has made some very interesting projections about the size of the internet economy in India. They are expecting exponential growth in the Internet economy over the next few years and they expect the Internet economy in India to touch $1 trillion by the year 2030.
That is a nearly 6-fold growth in the internet economy from the current levels. The growth is likely to be driven by e-commerce verticals. The report has noted that few countries in their internet journey have shown the speed and willingness of India to internet adoption. India already has over 70 crore internet users, of which 50% are accounted for by digital payments and 30% by online shoppers. The rest are spread out.
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Household consumption to double by 2030
One of the big bets in the report is that household consumption in India could double by the year 2030, which is a CAGR growth of about 10% from here. The growth in household consumption is likely to be in sync with the growth in B2C e-commerce, which is also expected to grow 6-fold by 2030.
The overall internet economy currently stands at $175 billion and by 2030 it is expected to be up by 500% at $1 trillion. By 2030, the GMV (gross market value) of B2C Ecommerce is likely to account for $380 billion or about 38% of the total internet economy in India. This period is also likely to see wider acceptance of digital tools and solutions by consumers and also by merchants.
B2B e-commerce to grow faster, but on a smaller base
It is not just B2C e-commerce that will drive the growth of the Internet economy. Even B2B e-commerce is expected to grow by about 1,300% by 2030 to $120 billion and would be largely driven by the SAAS segment. The proliferation of closed user group networks supported by 5G networks is likely to be a big boost for the B2B e-commerce in India.
In fact, 5G usage is likely to be a big boost for B2B e-commerce as it entails volumes and large data flows. Hence the success of the 5G rollout which is currently being undertaken by the leading telecom companies, will hold the key to this aspect of the internet economy growth in India.
India is already an internet-savvy economy
The report highlights that it is not just the internet penetration and internet adoption that are special about India. If one takes a granular break-up of online transactions and interactions, the numbers are quite revealing. It is estimated that over 22 crore people shopped online in India, while over 11 crore Indians made purchases from online gaming sites.
There are more interesting statistics. More than 6.5 crore Indians ordered food and beverages online while another 8 crore persons paid utility bills on the Internet. A smaller but important 2.5 crore people used ride-hailing services online while another 1.5 crore people signed up for online education courses. Indians have been splurging on the internet across the spectrum, and this is likely to only grow.
But, some challenges along the way
However, the journey to a $1 trillion internet economy is going to be a lot tougher. For instance, the bulk of the growth will have to come from the tier-2 and tier-3 cities. However, the internet infrastructure in most of these places does not match up to the metros.
To handle such an explosion in internet commerce, the efforts on cybersecurity, data integrity and storage have to be substantial and here is where the government will also have to chip in. But, as the report points out, the growth in the internet economy in India is going to be the big story of the decade.
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FAQs on India’s internet economy
What is India’s Internet economy?
India’s internet economy refers to all economic activities powered by digital technologies, especially the internet. It includes e-commerce, digital payments, online services, digital advertising, and content platforms. This economy reflects how the internet is reshaping consumer behavior, business models, and service delivery.
How fast is the internet economy growing in India in 2025?
As of 2025, India’s internet economy is growing at over 25% annually, outpacing traditional sectors. It’s projected to reach $1 trillion by 2030, driven by increased digital adoption and smartphone usage. Tier 2 and 3 cities are major growth hubs due to rising internet penetration and mobile-first users.
Which sectors are contributing the most to India’s internet economy?
Key sectors include e-commerce, fintech (digital payments & lending), edtech, healthtech, and digital content platforms. Logistics, online travel, and digital advertising also play significant roles. These sectors are scaling fast due to consumer convenience, accessibility, and innovation.
What is the role of UPI and digital payments in India’s internet economy?
UPI (Unified Payments Interface) has become the backbone of digital payments in India. It enables instant, seamless, and zero-cost transactions, empowering both consumers and businesses. UPI drives financial inclusion, boosts online commerce, and reduces cash dependency.
How does ONDC impact India’s e-commerce market?
ONDC (Open Network for Digital Commerce) aims to democratize e-commerce by making it open, inclusive, and vendor-neutral. It breaks the monopoly of large platforms and supports small sellers, local businesses, and kiranas. ONDC enhances competition, lowers costs, and expands digital commerce access.
How is the internet economy different from the traditional economy?
The internet economy operates primarily through digital platforms, data, and online transactions. It offers speed, scalability, and wider reach, unlike the location-bound traditional economy. It’s more dynamic and customer-centric, but also faces challenges like cybersecurity and digital literacy.
What challenges does India’s internet economy face in 2025?
Major challenges include digital divide, data privacy concerns, cybersecurity threats, and inconsistent infrastructure. Small businesses still struggle with tech adoption and digital skills. There’s also regulatory uncertainty around e-commerce, fintech, and data governance.
What is the future of India’s digital economy?
India’s digital economy has a promising future with AI, 5G, blockchain, and deep tech integration. Government initiatives like Digital India, UPI expansion, and ONDC are driving inclusive growth. With the right policies and infrastructure, India is poised to become a global digital powerhouse.