There's both the will and a way to unleash India's digital potential

India is not yet a digital star but it’s certainly rising as one and a well-focused action plan could accelerate this trajectory

- KUSHE BAHL & RAJAT DHAWAN

At first glance, India looks like a digital star, with inexpensive bandwidth, rising enthusiasm for e-commerce, and a fast-growing cluster of innovative companies. Our public digital infrastructure is getting broader and deeper by the day, and the number of internet users is fast approaching 900 million, more than double the figure of 2016.

And yet, we still have a lot of catching up to do.

Only one out of every 10 Indians, or 140 million people (compared to 710 million in China), is a regular online shopper; e-commerce penetration is just 19%. Venture capital funding dropped twothirds in 2023, making it more difficult for digital startups to get the capital they need.

How can India turn its enormous potential into growth that fosters both equity and economic competitiveness? Four opportunities come to mind.

Focus on inclusion as well as profitability: Earlier this year, McKinsey estimated that about threequarters of Indians fall short of full economic empowerment (estimated at a per capita income of about $5 a day), and that faster growth and business innovation could lift 700 million to that level by 2030. The digital economy, which has grown 2.5 times faster than the overall economy since 2016, could be a powerful force for sustainable and inclusive growth, not only through greater productivity, but as a way of delivering social goods, as the success of the Aadhaar and the CoWin and U-Win vaccination platforms have proven.