On 22 January 2025, the Ministry of Electronics and Information Technology (MeitY) released the report titled ‘Estimation and Measurement of India’s Digital Economy’.
This is the first study to assess/measure the value addition and employment generated by India’s burgeoning digital sector.
According to the report “India’s digital economy is poised to grow nearly twice as fast as the overall economy, contributing nearly one-fifth of the country’s national income by 2029-2030”
The Indian economy has been digitizing at a remarkable pace over the past decade. According to the ICRIER’s State of India Digital Economy Report 2024, India is the third most digitized country in the world in terms of economy-wide digitization and 12th among G20 countries in terms of individual user digitization.
Nonetheless, there are no credible and updated estimates of the digital economy in national income and employment.
The measuring and understanding of the digital economy promotes economic growth, employment and sustainable development, which are important for both policymakers and the private sector.
This can help customize resources and adopt appropriate growth strategies.
However, the intersection and integration of digital technologies make the concept of a unique digital economy difficult to define and measure. Furthermore, the traditional economic accounting system is not suitable for directly measuring the new economy.
This problem is not unique to India. Some countries have tried to measure their digital economies, and even these efforts are still ongoing.
This report uses a globally agreed methodology – a framework developed by the Organisation for Economic Co-operation and Development (OECD) and the Asian Development Bank (ADB) – to estimate the size of India’s digital economy, including its share of national income and total employment.
With the release of this data, India becomes one of the few countries to use the OECD framework to provide an updated estimate of the size of its digital economy, and the first among developing countries to do so.
The report goes beyond the OECD approach and also includes the digital part of traditional sectors such as trade, banking, financial services and insurance (BFSI) and education.
Current contribution and projections
India’s digital economy contributed 11.74% to national revenue in 2022-23, with projected growth to 13.42% by 2024-25, according to the report.
The digital economy contributed roughly Rs. 28.94 lakh crore (approximately US$ 368 billion) to India’s GVA and Rs. 31.64 lakh crore (approximately US$ 402 billion) to its GDP in 2022-23.