A recent report by Ask Capital projects that India is on track to become a USD 1 trillion digital economy by 2028, fueled by government digital initiatives, widespread internet penetration, and the rollout of 4G and 5G services. This transformation is reshaping India’s financial and economic landscape, positioning the country as a global leader in real-time payments.
India’s digital economy, which accounted for 4.5% of the country’s GDP in 2014, is projected to contribute 20% by 2026. The digital transformation is propelled by innovations like Unified Payments Interface (UPI) and affordable data services, enabling cashless transactions and online purchases across finance, education, healthcare, and e-commerce.
Digital Payments Surge
Between 2017 and 2023, retail digital payments grew by 50.8%. UPI is expected to drive 90% of total retail digital payments in India by 2027. The Reserve Bank of India (RBI) is also preparing to launch the Unified Lending Interface (ULI) to simplify credit access for small and rural borrowers.
Impact of Government Initiatives
Government initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY) and the Direct Benefit Transfer (DBT) scheme have enhanced financial inclusion, while healthcare programs like Ayushman Bharat Digital Mission (ABDM) and e-Sanjeevani are advancing digital health services. Education has also seen a digital shift, particularly during the COVID-19 pandemic, with schools adopting online learning.
Rapid Growth in Internet and Mobile Users
India’s telecom subscriber base has reached nearly 120 crore, with 95.4 crore internet subscribers as of March 2024, half of whom are from rural areas. The adoption of 4G and 5G technologies has significantly increased wireless data usage, growing by 21.69% between 2023 and 2024.
E-Commerce and Rural Digital Payments
The e-commerce sector continues to drive digital growth, with increasing digital payment transactions in rural areas. The report estimates that digital payments in India will grow to USD 10 trillion by 2026, further solidifying India’s path toward becoming a USD 1 trillion digital economy by 2028.
