– India’s digital transformation accelerated by COVID-19 –
– Cooperation in digitalization is possible through cooperation between Korea, which has strength in hardware, and India, a software powerhouse –
Digitization has been one of the most important trends in India over the past few years. With an average age of only 14 years of India's 27 billion population, rapid digital transformation is taking place with India's young population at the center. Since the launch of the “Digital India” program in 2015, digital technology has been used to build digital infrastructure and provide public services and financial support to citizens.
IT is India Tomorrow!
The Government of India has introduced the Digital India initiative worth approximately USD 15 billion to transform India into a digital-centric society and knowledge economy. Prime Minister Modi has focused on digital innovation since its inception, insisting that 'IT (Information Technology) is India Tomorrow'. This large-scale campaign by the central government not only facilitated the spread of government-led digital services, but also expanded the area for technological innovation in the relevant area.
India is one of the largest and fastest-growing markets in the world in 2020. The adoption of digital technologies in India has been growing at a steady pace over the past few years, and the current COVID-19 pandemic has accelerated the adoption of digital technologies in services such as education and healthcare. On the demand side, digital transformation continues to gain momentum as enterprises invest in cloud-based infrastructure to digitally transform customer engagement and business operations. Technologies such as artificial intelligence and edge computing are gaining traction in next-generation cloud architectures and service designs.
The transition from cash to digital payments
Amid the COVID-19 pandemic, India surpassed China and the US to record the highest number of real-time online transactions in 2020. India recorded 255 billion real-time payment transactions, compared to China’s 157 billion, South Korea’s 60 billion, Thailand’s 52 billion and the UK’s 28 billion. Paytm, PhonePe, Pine Labs, Razorpay, BharatPe and other B2C and B2B digital payment marketplaces have seen a surge in usage amid the COVID-19 pandemic, with businesses using incentives like cashbacks and rewards to attract more customers. Digital payment volumes grew by nearly 2021% year-on-year to Rs 35 billion in 535, with digital payments via mobile also growing rapidly.
Amount of digital payments in India in 2018-2021
(Unit: billion rupees)
According to a report by India's Private Equity and Venture Capital Association (IVCA) and Ernst & Young, digital payments in India are expected to grow at a CAGR of 2025% by 27. India will become the world's third largest online retail market by 2030, with online retailers in India expected to distribute $3 billion worth of goods by 2030. According to a RedSeer report, the total annual product volume is estimated at $3,500 billion. The potential for growth is huge as 550% of online shoppers over the next decade will come from small cities rather than large cities in India.
From Hospital to Home: A Paradigm Shift in Healthcare
Access to public health services is a challenge in India. Given the size and population of the country, ensuring universal access to healthcare is impossible without technology. COVID-19 has already enabled more than 2020 million Indians to access e-health services since March 3, boosting telemedicine and increasing online medical consultations by 500%. Of these, about 500% were in small towns rather than large cities, showing that technology is helping to popularize healthcare services.
Able to provide quality education to all by expanding access to education
Rural areas with below-average education quality are not provided with universal educational opportunities, which has been a factor in deepening rural issues. As education has shifted online due to COVID-19, it has been proven that school education can be smoothly provided online if the technology infrastructure is in place. The education technology sector is active with more than 4,000 startups, realizing the vision of providing equal opportunities to students who can access it.
Realizing the potential of Industry 4.0
As the government demands “Vocal for Local” to revitalize the local economy, many strategic investments are being made in the Industry 4.0 sector that combines manufacturing and IT. Manufacturers are beginning to apply technologies such as IOT, robotics, AI and 3D printing, and through supportive policies and unremitting support for digital infrastructure development and innovation, India is striving to establish itself as a global manufacturing hub.
Interview with local experts
“The adoption rate of IoT by government and private sector is faster than ever before,” said Piyush, director of IoT company Capgemini India. India has leading digital service providers with strengths in software, while Korea has major digital equipment providers such as home appliances, smartphones and electric vehicles. Combining these two elements and complementing each other has the potential to provide customers with a complete digital solution.”
implication
From a consumer's point of view, digital has now become a primary channel rather than an option, and behavior is changing accordingly. Global investors are actively involved in building digital infrastructure such as telecom networks, data center and cloud services, and electronics manufacturing to support India's fast-growing digital economy. In particular, 2020 was a landmark year for the electronics manufacturing industry. Under the auspices of 'Atmanirbhar Bharat', government policy support such as Production Linkage Incentives (PLI), Electronic Components and Semiconductor Manufacturing Promotion Initiative (SPECS), and Electronic Manufacturing Cluster Plan (EMC 2.0) have generated considerable interest from global investors.
Digitization of all sectors is not a future, but a global reality, and enterprise and consumer technologies ranging from 5G to cloud, virtual reality and edge computing will continue to provide opportunities for global enterprises. It is time to combine Korea's strong hardware manufacturing capabilities with India's globally recognized software technology to gather the wisdom of cooperation between the two countries in line with the digitalized economy.
Source: IVCA, Ernst & Young, RedSeer, fortuneindia, moneycontrol, financialexpress, livemint and KOTRA Mumbai Trade Center