Indian App Economy Blooms!

Mobile apps likely contribute 8% to Indian GDP by 2020

The growth of app economy is nothing short of extraordinary in India. App Annie recently ranked India as the fourth largest app economy in the world. “With over 94 percent subscribers connecting to the internet on their cellular device, it is no surprise that India is leading the global phablet revolution. Internet and internet-based applications have drastically and quickly transformed the architecture of economic activity,” says TV Ramachandran, President, Broadband India Forum.

A recent survey report of Indian Council for Research on International Economic Relations (ICRIER) reveals that there is a 17 percent increase in the total internet traffic in India in 2015-16 and contributed an increase of Rs 7 Lakh crores in GDP, of which at least Rs 1.4 Lakh crores was due to internet-based apps. This puts internet based app’s contribution to India’s GDP at about 5.6% in 2015-16. It is speculated that internet’s contribution would escalate to 16% of country’s GDP by 2020, of which apps would contribute about half.

A joint study by Broadband India Forum and ICRIER points out that a single app often delivers multiple socio-economic impact; sometimes a combination of economic and social development and sometimes different aspects of economic growth or social upliftment.

TV Ramachandran, President BIF
TV Ramachandran, President, BIF

The major contribution of app in India in the past few years are as follows:

  • Potential for Increased Income: Urbenclap- Income for service providers within some categories increased by four times
  • Impact on social perception and self-image of differently-abled: Inclov- Facilitated matchmaking for the handicapped and transformed physical spaces into accessible areas for the differently-abled
  • Job creation: Inclov- Partnered with hotels to create employment for the differently-abled, direct employment by each of these apps, including MMT and PayTM, which work with a team of 1000 employees each
  • Lowering costs of buyers and sellers: farMart- platform enabled demand-supply match lowered cost of equipment leasing by upto 20%
  • Enabling Women’s safety: Truecaller- Caller identification has helped women manage and block calls from unwanted numbers/people. (From ICRIER Study)

But there are also potential challenges that may limit the future growth of the app economy. On the supply side, most apps were affected by the limited availability of network/internet connectivity. Moreover, app design needs to allow light version that operates even in poor networks and on basic smartphones. Demand side challenges identified are largely associated with the availability of content in regional languages. Data privacy has also emerged another key concern among the app users.

Mr Ramachandran also notes that India needs to devise its own nation-centric laws and regulations to fuel the growth of app economy. “India needs to chart its own course from a policy/regulation perspective considering the significant higher impact in the economy,” concludes Mr Ramachandran.

Source: Broadband Indian Forum and ICRIER

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