Table of Contents
How Much Does Technology Contribute to the Indian Economy?
Which Indian Sectors are making the Most Profits Due to Technology?
How Much Will Technology Contribute to Indian Economic Growth: 2024 and Beyond
As India propels towards becoming a $10 trillion-dollar economy, the role of technology stands central in steering this ambitious journey. A recent statement by IT Minister Rajeev Chandrasekhar underscores the government’s commitment to make technology contribute 20-25% of the country’s GDP by 2025-26. Know all about the contribution of technology to Indian economic growth, the topmost sectors reaping the benefits, and how it is poised to shape India’s economic future.
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How Much Does Technology Contribute to the Indian Economy?
India’s digital proficiency and innovation have reached unprecedented levels, evident in transactions happening within minutes and doorstep deliveries at lightning speed. The digital economy has already grown from 4-5% in 2014 to 10% today, making a substantial contribution to India’s economy today.
The IT industry is a key player in India’s economic landscape, generating substantial revenue, providing employment opportunities, and contributing to the country’s global competitiveness. The government’s initiatives to further enhance digital infrastructure and promote technological innovation suggest a continued and growing monetary contribution to Indian economic growth in the coming years.
The India AI program, focusing on AI, semiconductors, microelectronics, and Web3 technologies, forms a crucial part of this growth. AI, described as a kinetic enabler, adds a valuable layer to the progress made by startups and the innovation ecosystem, particularly in the consumer internet and data economy.
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Which Indian Sectors are making the Most Profits Due to Technology?
Healthcare and Insurance Sector
The healthcare and insurance industries in India are poised for remarkable expansion and advancement in the coming years, thanks to a confluence of factors. Increased demand for healthcare products and services, coupled with government efforts, forms a solid foundation for Indian economic growth.
Technology improvements, including the integration of artificial intelligence (AI) and data analytics, enhance healthcare delivery and streamline insurance processes. The rising penetration of health insurance further amplifies opportunities for businesses within these sectors to expand their market share and explore new business possibilities.
The healthcare and education sectors are also undergoing significant transformations in a global economy marked by continuous Indian economic growth, turning fragmented systems into integrated, patient-centric models and making learning more accessible and engaging. The use of digital platforms for insurance services and telemedicine applications is reshaping how these industries operate, making them more efficient and accessible.
Information Technology (IT) Sector
India’s prowess in the global IT sector continues to fuel significant profits and Indian economic growth. The country’s abundant supply of highly qualified workers and a favorable business climate have attracted international corporations to outsource IT projects to Indian businesses.
The sector is rapidly embracing modern technologies such as artificial intelligence (AI), cloud computing, and the Internet of Things (IoT). Government initiatives like the Digital India program, aimed at providing broadband connectivity and promoting digital technology, further boost the IT sector.
The export value of the IT sector exceeded $149.1 billion in the financial year 2021, showcasing its significance domestically and internationally. By 2025, IT sales are expected to exceed $300 billion, underscoring the sector’s pivotal role in the Indian economic growth story.
Fast-Moving Consumer Goods (FMCG) Sector
Rapid urbanization, changing lifestyles, and increased disposable incomes have fueled significant Indian economic growth in the Indian FMCG sector. Technology is playing a transformative role in this industry, with a growing emphasis on e-commerce and digital marketing.
FMCG firms are leveraging technology to introduce new products, especially those catering to the increasing demand for healthy and organic goods. The rise of online shopping platforms allows these companies to directly engage with consumers, shaping their preferences and driving sales.
Automobile Sector
The automobile industry, contributing 7% to India’s GDP, is leveraging technology to overcome recent challenges. Amidst decreased demand and regulatory changes, the sector is poised for a rebound driven by technology adoption.
Initiatives like the Faster Adoption and Manufacture of Electric Vehicles (FAME) plan signify a commitment to embracing electric vehicles, aligning with global trends. Growing incomes, urbanization, and infrastructural development are expected to play pivotal roles in the industry’s resurgence.
Manufacturing Sector
Furthermore, the manufacturing sector is witnessing a transformative impact, with technology optimizing the entire value chain, from research and development to quality assurance. It has always been a major force in Indian economic growth and is expected to add to it in 2024 and beyond.
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How Much Will Technology Contribute to Indian Economic Growth: 2024 and Beyond
The future of technology vis-à-vis Indian economic growth looks promising across various sectors. India is gearing up for significant economic growth driven by its digital prowess and strategic initiatives. The government, under IT Minister Rajeev Chandrasekhar, aims to have technology contribute 20-25% of the GDP by 2025-26, totaling around $5 trillion.
The digital India economy, spanning semiconductors, AI, blockchain, and more, has seen Indian entrepreneurs and startups excel, growing from 4-5% in 2014 to 10% in 2023. Artificial Intelligence (AI) takes center stage with the India AI program, fostering collaboration between the government, academia, startups, and industry. With a $150 million budget, three Centers of Excellence will drive innovation and infrastructure development.
The Information Technology/Business Process Management (IT-BPM) industry is a crucial contributor, representing 7.5% of India’s GDP in 2023. Various sectors, including healthcare, renewable energy, real estate, FMCG, and automobiles, are expected to offer excellent returns in the years to come. Government initiatives like Ayushman Bharat and the FAME plan support these sectors, emphasizing the commitment to inclusive economic development in India and technological advancement.
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Conclusion
As the governments aims for a $10 trillion India economic growth, its digital drive, inclusive growth strategies, and proactive government policies position it as a promising investment destination in 2024 and beyond. The nation is surging towards becoming a global economic powerhouse, and technology emerges as the linchpin of this growth story.
The trajectory of sectors like IT-BPM, healthcare, manufacturing, and education showcases the transformative power of technology. As India addresses challenges like skill gaps and ensures business-friendly policies, technology is poised to define not just a decade but an era, propelling the Indian economic growth story to newer heights of success.
