According to a report by McKinsey & Company, India's Gross Domestic Product (GDP) could see contribution from Internet services and devices up to 3.3 percent by 2015. The report attributes the growing number of Internet users, consumption and investment during the period for the projected growth.
By 2015, the report says, the contribution from Internet industry will increase from existing $30 billion to approximately $100 billion if the industry reaches its potential. The report notes India is “on the verge of an Internet boom”, considering the falling costs of Internet access and mobile devices.
"The Internet currently contributes a modest 1.6 per cent to India's GDP in line with most aspiring countries. This could grow to 2.8-3.3 per cent by 2015, if India achieves its potential for growth in the number of Internet users and Internet technology related consumption and investment over this period," says the report.
Currently, India's Information and Communication Technology (ICT) exports are said to be the most significant part of the Internet's impact on GDP but growing consumption and investment from public and private sectors could help increase the contributions. India has a user base of 120 million, becoming world's third largest Internet market. By 2015, the numbers are likely to be around 370 million.
With user base of 480 million users base China has the largest Internet market, while the US has 245 million users, as of 2011. By 2015, China is predicted to have have 583 million users, while the US is expected to have 279 million users. The global web user base is likely to rise from from 2,300 million users in 2011 to 2,662 million by 2015, the McKinsey & Company said in the report.
"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," it said.
The report, however, added that the impact if Internet in India mainly depends on the current Internet infrastructure. "While India scores well on availability of human and financial capital. It rates poorly on Internet infrastructure, Internet engagement, e-commerce platform, ease of Internet Entrepreneurship and the impact of e-governance," it said.
Source: Economic Times