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Can Modi succeed in digitizing the Indian economy?

In spite of the increasing value of online commerce sales per capita during 2011-15, India’s online commerce market will only reach its full potential through implementation of financial education programs, increased access to electronic payments, and investment in digital payments infrastructure.

India is home to a sixth of the world’s population, making it the second-largest consumer market globally behind China. Although it is still largely a cash-driven economy, the country has made significant strides towards electronic payment adoption in recent years.

Efforts have been boosted by Indian Prime Minister Narendra Modi launching the Digital India campaign in July 2015. The initiative includes plans to connect rural areas with high-speed internet networks and includes three main components: developing digital infrastructure, improving delivery of services digitally, and boosting digital literacy.

Our Online Consumer Payments Analytics dashboard shows that the value of Indian online commerce has continuously increased in recent years, reaching $18.4bn in 2015. Meanwhile the value of online commerce sales per capita rose from $4.80 in 2010 to $11.90 in 2014 and $14.70 in 2015; the largest year-on-year growth was 45% in 2012, followed by 25% in 2011 and 24% in 2015. These figures demonstrate that Indian consumers have become increasingly confident online, and we forecast that the value of online commerce sales per capita will reach $48 by 2020.

However, achieving this milestone will only be possible if Modi’s strategy delivers improvements in access to electronic payments and develops awareness through financial education programs. Digital literacy and migration of services online should also be accompanied by government investment in digital payments infrastructure in order to ensure improved front-end and back-end online payment systems in the Indian market.

For more information please contact Nicolae Bacila at