India's digital economy will surge 6-fold to around US$1 trillion by 2030, led by a growing appetite for digital products and services among its Tier 2+ cities, a joint report by Google, Temasek and Bain & Company found.

The country’s internet economy will also grow to 12-13% of GDP over the same period from 4-5% now, The e-Conomy of a Billion Connected Indians reported.

The inaugural report on India was driven by the country’s immense potential, brought about by the confluence of three crucial forces – the growing interest of consumers from Tier 2+ towns and cities in digital products and services, as well as the rapid digitisation of large businesses and micro, small and medium enterprises (MSMEs), and the success of India’s national digital infrastructure, or the ‘India Stack’.

The report tracks the performance of key digital sectors – business-to-consumer (B2C) and business-to-business (B2B) e-commerce, online travel, food delivery, media, ride-hailing, edtech, healthtech, and Software-as-a-Service (SaaS) – and outlines the opportunities, challenges and enablers for growth. It also provides an outlook for nascent sectors and India’s technology funding landscape, and insights into consumers’ digital preferences and investor intent.

Despite current global headwinds, investor confidence and interest in India remain strong. Three in five investors expect deal activity to rise in the next two to three years, with digital companies drawing the bulk of allocations in the next five to seven years.