India Goes Digital To Unlock a $5 Trillion Economy

2020 is a landmark year in many ways. We have just completed 25 years of mobile telephony. Starting from barely 4% tele-density, we now have over 94% of our population connected. Even more interestingly, with 600 million Indians online, we have the world’s second largest internet user base. India accounts for over 12 percent of the global Internet users and has surpassed US and China to become the largest data consuming economy with the lowest tariffs.

Yet, the lockdown of 2020 demonstrated how the absence of digital connectivity to over 50% of our population inhibits their growth - and causes a deep digital divide. While those with Internet access have been able to access education, healthcare and livelihoods - those without have had to struggle much harder.  Covid-19 has made it abundantly clear - Now is the time to leverage the power of data and digital technologies. India, currently a $2.7 trillion economy, has big ambitions to reach $5 trillion - with double digit GDP growth in the coming years. Digitalization of our telecom infrastructure and ubiquitous connectivity, offer a unique opportunity for India to leapfrog regardless of our limited physical infrastructure. India should capitalise on this opportunity to achieve the $5Tn dream and show the way for developing countries.

Being Atmanirbhar can put India on the path to the $5 trillion economy

India’s telecom sector has the unique advantage of large scale and wide range of rural and urban use cases. With such a wide variety of use cases and customer affordability, Indian telecom can aim to become a leading contributor to the global supply chain. As the second 50% of the world gets access to the Internet, digital networks are getting fundamentally re-architected to become open, disaggregated and virtualized. This creates an unprecedented opportunity for Indian telecom to develop new intellectual property and technologies.

The ultimate goal should be to pursue India a chipset-to-software strategy that encompasses system integration as well. This will help the country capture some critical parts of the value chain and compete on the international stage. An ecosystem of alliances between domestic companies and international partners is one way that India can make the most of the opportunity. Technology leadership and India-held IP to deliver digital networks for 5G, and device manufacturing for the world can establish India as a leading clean-nation as a part of the global supply chain. This will boost the Indian economy and help to achieve the $5 trillion economy vision at an accelerated pace.

In the coming years, Indian manufacturers can play an active role in building globally competitive products and a robust supply chain that could strengthen the country’s position in the telecom equipment space. This is more so the case given India today has a combination of incumbents, start-ups and institutions all working towards developing unique network solutions in spaces like 5G. We believe that a consortium-led approach would be a good move with a focus on taking Indian companies to international levels in capacity and capabilities.
Today when everything is going digital, it becomes critical to have a reliable network architecture. India is a regional economic powerhouse that ranks 88th globally in the Network Readiness Index (NRI). We should focus on building next-gen infrastructure by incorporating the latest technologies, and by exploring new collaboration models between businesses and government, and target to bring India to the top of the NRI list.

Government-industry collaboration is the key to achieving $5 Trillion mark

With its immaculate fusion of a great vision, a strong implementation roadmap and the passion of the entire country, India holds the cards for realising the benefits of a digital economy. The country, however, needs a stronger digital infrastructure to help communities and businesses leverage the digital shift. This requires a scale of investment that private players cannot achieve alone. The government needs to step in and collaborate with private players to ensure time-bound creation of digital infrastructure. Some of the steps that can be taken towards this are:

• Unlock WiFi6 Spectrum - Telecom operators, private networks, cloud companies, and new players can participate and/or lead the building of new WiFi and LTE/5G networks. Instead of waiting for monetizing spectrum licenses, the government should consider the enterprise spectrum. This will boost the GDP growth by multi-fold, yielding higher efficiencies than monetizing spectrum licensing in the next 2-3 years.

• Reallocate funds - Digital infrastructure gives twice the returns as physical infrastructure does to the economy; it also requires investment at par with physical infrastructure. The government can reallocate funds from other infrastructure projects such as roads, transport, power, railways, and petroleum as it will lead to greater returns for the same investment and accelerate towards $5 Tn goal.

• Public-Private Collaboration - Such collaboration will be an important component in accelerating digital adoption in the country and enabling India’s vision of becoming a $5 trillion economy. This can be achieved by out-of-the-box thinking to maximize technological innovations, by following a consistent, singularly focused approach towards the larger objective, and by undertaking meaningful collaborations with the private sector. The private sector should be roped in to play an active part in the designing and planning of digital infrastructure.

• Support Indian companies through incentives, gap funding, taxation policy, etc: This approach has been adopted in different capacities by many of the larger economies in the world like the US, UK, China, etc. To ensure that Indian companies are able to effectively compete on the global arena, it is important that the Government assists the industry through measures like supportive taxation policies, preferential rates for high-tech companies and tax deductions on R&D expenses. Setting up a large investment fund that can aid promising companies and start-ups can also be a game changer

For the last 25 years, India has conquered many unchartered territories despite jumping on the technology wagon a little late. We now have the opportunity to be the definitive leader for this next phase of technology revolution. With the scale and diversity of India, this shift towards digital will inspire and set new standards and models for countries around the world. All this while achieving our dream of a $5 trillion economy and being an Atmanirbhar economy.