Indian internet economy

Internet’s contribution to GDP will grow from $30 billion to $100 billion by 2015

The Internet has established its role as a powerful economic force multiplier with a new study projecting that its contribution to India’s GDP will explode to $100 billion (Rs. 5 lakh crore) by 2015 from $30 billion (Rs.1.5 lakh crore) at present.

The study on the “Impact of Internet on the Indian Economy” by McKinsey, which is still to be released, could well become a new anchor for the government’s programmes to enhance digital citizenship.

Revealing the highlights of the study, in the presence of Telecom Minister Kapil Sibal at a curtain raiser held to announce a two-day multistakeholder conference on Internet governance to be held at FICCI here on October 4-5, McKinsey said the contribution of the Internet to global GDP is roughly three per cent or $1.7 trillion and its performance in India will eventually mirror this trend.

The world currently has 2 billion Internet users, of whom 50 per cent live outside the developed world. The global Internet population is projected to climb to 2.6-2.9 billion by 2015. According to McKinsey, of this, 30 “aspiring countries” with a very high economic growth have seen Internet users grow at five times the level in the developed world. In the next 10 years, netizens in these 30 countries are projected to grow at 10 times the pace in the developed world.

By 2015, based on existing projections, India, which with 120 million users has the third largest Internet user base in the world, is projected to hit 350 million, catapulting it to a global ranking of 2, with the fastest rate of growth. An alternative growth model used by McKinsey, factoring in the trend that wireless-based expansion usually overshoots any standard formula, presents a more ambitious forecast of half a billion Internet users by 2015. This is good news for mobile companies since three out of every four or 75 per cent of all new Internet users in India are expected to go online, using wireless devices. Globally, 15-20 per cent of the users access Internet on wireless technologies, while in India this figure will eventually be closer to 55 per cent.