According to a new report in The Boston Consulting Group’s Connected World series, The Indian Internet economy contributed Rs. 3.2 trillion to the overall economy in 2010, representing 4.1 percent of GDP, and is projected to rise to Rs10.8 trillion by 2016. It found that by 2016 the total size of the G-20 Internet economy will be $4.2 trillion, equivalent to 5.3 percent of GDP, up from $2.3 trillion or 4.1 percent in 2010.
'The $4.2 Trillion Opportunity: The Internet Economy in the G-20' finds that if the Internet were a sector, it would be the 8th largest in India – larger than mining and utilities. It is driven especially by exports of IT services: net exports make up 59 percent of the Indian Internet economy, while consumption is only 20 percent.
India's Internet economy growth rate of 23.0 percent places it as the second fastest across the G-20 and ahead of many other developing nations in the G-20, which are growing at an average of 17.8 percent. Projected growth rates elsewhere are: 24.3 percent in Argentina, 18.3 percent in Russia and 15.6 percent in Mexico. In 2010 developed markets contributed 76 percent of the G-20's Internet economy; by 2016 that will fall to 66 percent.
Consumption is the principal driver of Internet GDP in most countries, typically representing more than 50 percent of the total in 2010. It will remain the largest single driver through 2016. China and India stand out for their enormous Internet related exports- China in goods, India in services - which propel their internet-economy rankings toward the top of the chart,"said Arvind
Subramanian, a Mumbai-based BCG Partner. He further added, "In emerging countries like India, social media are fast becoming the internet medium and mobile the access medium of choice.
The $4.2 Trillion Opportunity builds on three years of research conducted by BCG and is the most comprehensive report published on the impact of the Internet globally. This study is the first to examine the Internet's economic impact across so much of the world's economy - 90 percent of global GDP - and highlights how this increases as mobile devices and social networks become more prevalent.
Rajan Anandan, VP - Sales and Operations & Managing Director, Google India, said, "India is seeing one of the fastest rates of internet adoption across the globe. It is up to all of us- users, businesses and the government-to leverage the potential of the Internet to deliver value and wealth. We see emerging opportunities for innovation in areas like mobile, e-commerce and cloud and are committed to growing the market by offering more locally relevant services."
