Internet to contribute $100bn to India's GDP by 2015: McKinsey

  • PTI, New Delhi
  • |
  • Updated: Dec 19, 2012 19:31 IST

Internet services and devices industry has potential to increase its contribution to up to $100 billion (about Rs 5.5 lakh crore) to India's GDP and generate about 2.2 crore jobs by 2015, a report by McKinsey & Company said on Wednesday.

Internet related technology industry includes personal computers and smartphone sales, e-commerce, broadband subscription, and investment in technologies like cloud and websites.

According to the report titled 'Online and Upcoming: The Internet's Impact on India', Internet generated 1.6% of the GDP or about $30 billion in 2011.

"The Internet currently contributes a modest 1.6% to India's GDP. This could grow to 2.8 to 3.3% by 2015, if India achieves its potential for growth in the number of Internet users and Internet technology-related consumption and investment," McKinsey & Company Partner Chandra Gnasambandam told reporters here.

This would increase Internet's contribution to GDP from $30 billion now to nearly $100 billion in 2015, he said.

"And while it facilitates about six million direct and indirect jobs at present, this could grow to 22 million by 2015, if India follows an inclusive path of Internet expansion." Gnasambandam said.

India with a user base of 120 million is the world's third largest Internet market and is poised to garner up to 370 million users in 2015, the report said.

China has the world's largest Internet user base with 480 million users, followed by US (245 million) in 2011.

By 2015, China is expected to have 583 million users, while the US is expected to have 279 million users.

The global Internet user base is expected to grow from 2,300 million users in 2011 to 2,662 million by 2015, the report said.

"Given current downward trends in the cost of Internet access and mobile devices, India is on the verge of an Internet boom. India is likely to have the second largest user base in the world and largest in terms of incremental growth," McKinsey & Company Global Institute senior fellow Anu Madgavkar said.

At present, India's information and communication technology (ICT) exports are the most significant component of the Internet's impact on GDP, but private consumption and investment from private and public sector have great potential to grow in the future, she added.

Madgavkar, however, added that the impact of Internet in India is constrained by the current infrastructure.


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