India's internet economy would reach $1 trillion by 2030: Google report

A persistent shift in consumer behaviour and evolution of the business ecosystem will support the growth of India's internet economy, from approximately $175 billion of consumption in 2022 to approximately $1 trillion by 2030, according to a report titled 'The e-Conomy of a Billion Connected Indians' published by Google, Temasek, and Bain & Company

The research offers insights into the core areas of the internet economy powered by digital consumption, including e-commerce, online travel, food delivery, ride-hailing, and more. It is based on investor and consumer surveys as well as Bain & Company analyses.

The success of India's domestic digital public goods, or the 'India Stack,' has placed the internet economy for acceleration due to the convergence of three key forces: the digital-seeking behaviours of internet users in Tier 2+ locations, the digitization of large, traditional businesses along with a growing startup ecosystem, and the success of India's homegrown digital public goods.

The report emphasises that the internet economy's contribution to India's technology sector is expected to grow from its current level of 48% to 62% in 2030, while its contribution to the country's GDP will rise from 4-5% to over 12-13%.

Three out of five investors predict an increase in deal activity in the next two to three years, and the majority of investors state that over 75% of their funds will be allocated to digital investments in the next five to seven years, demonstrating an overall investor optimism on India as a favourable investment destination.

Late-stage businesses will get greater investor attention than those in early stages because of the increased emphasis on profitability, growth, and startups.