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Investing in India’s digital economy

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It was supposed to help realise dreams. India’s consumer technology unicorns were riding on India’s aspirational middle class. There was an overall downward trend in the technology sector around the world. The Nifty IT sector index fell 27% in 2022, while the US Nasdaq 100 is down 35%. The Indian consumer technology firms, from fintech to food delivery, have shed weight significantly since their IPOs last year.

The wonderland of investments gets even better in such a situation. When others are fearful, you can try getting greedy a bit. Consumer technology is here to stay. It may evolve in other forms, but it changes how things are done in India. The whole digital economy is making a difference. These are business which have a different business model and carry a higher gestation period. But some of them have significant operating leverage leading to significant free cashflows in the future. So patience is a virtue here.

The latest bulletin of the Reserve Bank of India published a very riveting analysis of India’s digital economy. The article states that India’s core digital economy rose to 8.5% of the GDP on a gross value-added basis in 2019 from 5.4% in 2014. An overall 22% of output was due to a digitally dependent economy in 2019. The growth rate was 2.4 times faster than the rest of the economy, with strong linkages to non-digital sectors. The most exciting finding is about the output multiplier. A US$1 increase in final demand for digital sectors would lead to an increase of US$1.5 increase in the output of this sector in 2019. That output has increased for the digital economy and decreased for the non-digital economy over five years to 2019. The rising output in the digital economy indicates the underlying change in the economy. The article also argues that the digital economy could generate around 60-65 million employment opportunities by 2025. This should be an eye opener for all the pessimists and non-believers of the potential of Digital companies.

The government of India has made significant efforts to promote the growth of the digital economy, and a robust support infrastructure is in place. That support includes programs and initiatives to help businesses understand and use digital technologies and funds and resources available to help Small and medium-sized businesses (SMEs) leverage digital technologies. India is also one of the countries with the most active start-ups, and there is a growing demand for digital services and products.

As India quickly moves from a traditional economy to a digital economy, businesses have vast opportunities to get involved. From creating new digital products and services to transforming existing ones, there are vast opportunities for businesses of all sizes to get involved. With new technology constantly evolving, businesses that don’t take advantage of these changing times will find themselves at a disadvantage.

The other key factor driving the growth of the digital economy is the large population of young people using digital technology. As a young citizen, you want to connect with friends and family, stay updated on the news and do your investments as well. If you wish to identify the right ways to invest in India’s digital future, Alphaniti can help you identify suitable options. Remember to visit


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India’s digital economy grew 2.4 times faster than economy in 2014-19: RBI article – The Week

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