The amount of money spent on apps is projected to reach around $800 billion (₹64 lakh crore) by 2030, and given that the Indian economy is expected to be around $6,600 billion by 2030, the app spending is likely to be around 12 per cent of the GDP.
A study by Broadband India Forum (BIF) titled “The Economic Value of the App Economy in India”, reveals that the growth in the app economy is around 32 per cent, which is more than four times the GDP growth. This significant growth can be attributed to the larger multiplier effect of smartphone users and overall economic expansion, it said.
“India’s aspiration to become a $5 trillion economy in the next few years is premised on a $1 trillion contribution from the digital economy. Apps are an integral part of the digital economy as they empower individuals, businesses, and governments to make informed, data-driven decisions. They are expected to have a positive impact on overall productivity and GDP,” Aruna Sundararajan, Chairperson, BIF, said.
The study was based on the amount of money spent by the users on smartphone apps, reflecting the framing of the app economy as the attention economy. The study can be seen as a lower-bound estimate of the impact of apps on the overall economy, BIF said.
If the Indian government increases its push towards digitisation and more and more businesses shift towards apps, this number is likely to be higher than the current estimate, it said. In addition, the penetration of 5G is likely to accelerate the adoption and usage of apps, it added.
App economy contribution to India’s GDP
The independent policy forum and the think tank also noted that the contribution of the app economy to India’s GDP is higher than that of the EU and UK for 2021. This is possibly due to the relatively higher value of payments made on mobile in India. Nearly 85 per cent of the total digital transactions in India, which include credit and debit cards and Internet banking, are made through mobile payments.
“Apps are creating huge multiplier effects through induced and indirect effects. Considering the significant impact of the app ecosystem on the country’s economy and the socio-economic welfare of its citizens, the government must be commended for enabling this through the current policies and regulations for apps. The same support should be continued to help unlock the true potential of the app ecosystem in India,” TV Ramachandran, President, BIF said.
The study was unveiled by Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology, and Skill Development and Entrepreneurship.