Amid gloom, Indian digital economy booms in the post-Covid era

India’s digital ecosystem undoubtedly is one sector which has reasons to cheer amid the global outbreak of Covid-19. The country’s digital industry has already seen an exponential growth both from the supply and consumption sides since pandemic broke out, severely impacting the social and economic arena.

According to a recent article authored by Bloomberg Intelligence equity strategists Gaurav Patankar and Michael Casper, a “combination of policy incentives and coordination among India’s tech industry, regulators and government” is set to push the country's digital industry.

“If India catches up with China’s digital market cap as a percentage of GDP, we see a $375 billion opportunity,” Patankar and Casper said, adding that digitization of consumption, de-conglomeration of traditional industries and fintech would emerge as dominant themes as India gears up for a post-Covid situation.

With the outbreak of Covid 19 pandemic, the need to adopt and adjust to the digital landscape has only increased, though digital literacy continues to remain a challenge.

The Economic Times quoted Facebook India’s managing director Ajit Mohan as saying that “technological revolution” is unlike “anything humankind has experienced before.”

An EY report published earlier this month noted that Indian homemakers were increasingly adopting digital payments and online applications for both work and entertainment. It revealed that 52 per cent of the 385 respondents increased usage of online services and digital payments to save time and effort. Digital India is one of the main focus areas of Prime Minister Narendra Modi and his team.

“Between Covid-19, tech nationalism, geo-strategic realignment and the opportunity to create digital value, we see a different script. So far, digital consumption platforms like Amazon.com and Flipkart have been foreign or in the private markets, something we expect to change,” the Bloomberg article pointed out. The digital industry could see several new players, many of which are likely to be Indian.

While the coronavirus pandemic has impacted several sectors, it has also led to growth of new segments. “Digital industry in India was already booming. It was gaining more and more focus even before the pandemic broke out but coronavirus lockdowns have brought to light the unparalleled importance of this segment in a world with a formula scripting a new normal way of life,” an analyst engaged with a multinational company said.

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