The internet services sector in India is expected to reach $76.4 billion in 2022, up by 44% from its current valuation of $33.8 billion, according to a report published by the Internet and Mobile Association of India.
The report titled ‘Economic Impact of Internet Services in India’, however, lays out certain recommendations, which if brought to fruition, can bring the sector’s value to $124 billion.
According to the report, the number of internet users in India is projected to increase 1.6x times from 481 million at present to 762 million in 2022. Smartphones users in India, too, are expected to grow 1.7x times to hit 526 million in 2022.
The report suggests that the sector can reach its potential of $124 billion if certain factors are realised. These include forward-looking and supportive government policies, better infrastructure for widespread internet connectivity, developed distribution network for better connectivity to customers in Tier II/III cities for e-commerce, and adoption of digital and advanced technologies across the ecosystem and offline sectors etc.
“On the technology and business side of internet services, the internet will fundamentally change the way the needs, aspirations and demands of the consumers will be addressed. Pivoting on that, the internet services sector is expected to witness a plethora of changes in the future,” the report said.
The report covers identifiable internet services such as e-tailing, online travel agencies, online classifieds, digital advertising, education technology, food technology, health technology, digital entertainment (including online gaming), financial technology and digital payments.
The report mapped digital payments as a sector but did not include its total market size due to the challenge of double counting.
IAMAI stated that sectors like agri-tech, Internet of Things, artificial intelligence and machine-to-machine communications have been kept outside the ambit of this study because they are yet to gain any critical mass that could be used as a benchmark for future projections.
The study concludes that the proliferation of internet services will generate employment in three levels—in the primary level, jobs will be created in the fields of product design and development, sales and marketing, seller and customer management and more; the secondary level will comprise the self-employed class such as sellers, cab drivers, utility service providers and content creators; the third or tertiary level of employment generation will include allied industries providing on-ground field support to the internet service providers.