India's digital economy would stand at around $1 trillion by 2025, said Alok Kshirsagar, Senior Partner at McKinsey in an interview with CNBC-TV18. The country's digital economy currently stands at $200 billion.
India is digitising faster than any other country, except Indonesia, McKinsey’s analysis of 17 mature and emerging economies throws up. However, the country’s digital story is still in its infancy.
India’s digital score is low at 32 out of a score of 100. But, according to McKinsey, the nation has the potential to be a truly connected country by 2025.
“We are at infancy. We have now got nearly 600 million mobile internet subscribers, they are just starting to use the full power of their phones and the network to consume media and news, but we are now starting to see a whole host of new services come through that. Over half of that, more than 500 billion is going to come from new sectors, for example, healthcare, agriculture, financial services, transportation,” Kshirsagar said.
Speaking about the key digital contributors, Anu Madgavkar, Partner at McKinsey Global Institute, said, “The composition of the $200 billion is very different from the composition of the $1 trillion. It is a lot of the so-called real sectors which till now have not really experienced digitisation through their supply chains, through their interactions with consumers which will actually kick-in and that process will affect lots of parts of the economy which till now we have not seen.”
“Part of the $1 trillion, for example, is all of the savings and productivity gains in the logistics sector which could unlock something like $50-70 billion of incremental value add by 2025,” Madgavkar added.