Age of the ‘digital revolution’

From neighbourhood meets being replaced by social media, matchmakers by matrimonial and dating apps, flagging cabs to online bookings, cash and cheques to mobile payments; the world is quickly transitioning to all things digital!

In fact, India estimates that its digital economy can grow to USD 1 Trn by 2025¹!

This opens up a world of opportunity for stocks and companies that supply to or benefit from this rapid digitization.

What are the growth drivers for this trillion-dollar Digital India opportunity?

• Demographic factors

India is the second populous country in the world, with rising per capita income and a rising young population. They being the main consumers of digitisation, also makes India the second largest internet market in the world². Smartphone penetration in India today exceeds 50% and is expected to nearly double to 96% by 2040³.

Digital infrastructure in the country must grow rapidly to cater to this fast-rising demand.

• Global IT hub

A vast and diverse talent pool of skilled professionals, comparatively lower human resources cost than the world and high level of innovation and R&D have made India a preferred destination for global IT outsourcing.
As per NASSCOM report, almost 50% of Fortune 500 companies have chosen India for its software development outsourcing⁴.

• Start-up culture

India is home to nearly ~39,000 active start-ups today⁵. A whopping 72% of these are from the tech field⁴. Several of these start-ups go on to eventually achieve Unicorn status. Increasing investor interest, high level of innovation and government support is expected to see IT start-ups in India grow at a tremendous pace.

• Government push

The government’s ‘Digital India’ program and its various initiatives are providing a significant push to the IT sector.

• High adoption of new technologies such as block chain etc

New technologies such as Blockchain, AI, IoT, Cloud computing, Robotics and the like are seeing fast adoption amongst industries. These accelerating technologies are going to boost penetration of Digital India further.

1. https://www.livemint.com/news/india/indias-digital-sector-valuations-will-cross-1-trillion-by-2025-says-pm-modi-11655906031139.html
2. https://www.statista.com/statistics/309866/india-digital-population-by-type/
3. https://www.statista.com/statistics/1229799/india-smartphone-penetration-rate/
4. https://michaelmegarit.com/blog/4-reasons-why-india-is-now-a-global-technology-hub/
5. Inc42 plus report – The state of Indian Start-up Ecosystem, Report 2021

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