State of

India’s
Digital
Economy

2025
State of India’s Digital Economy (SIDE) Report, 2025
Deepak Mishra, Mansi Kedia, Aarti Reddy, Krithika Ramnath and Sruthi Vanguri

ISBN: 978-81-954132-5-6

Copyright © 2025 by Indian Council for Research on International Economic Relations (ICRIER)
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Published on
February, 2025

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Mishra, D., Kedia, M., Reddy, A., Ramnath, K., & Vanguri, S. (2025). State of India’s Digital Economy 2025. IPCIDE,
Indian Council for Research on International Economic Relations (ICRIER)

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 State of India’s
Digital Economy
2025
 Authors Advisory Board

Deepak Mishra Aruna Sundararajan Pramod Bhasin

Director & Chief Executive Chairperson (BIF), Former Chairperson,
Secretary of DoT and MeitY ICRIER

Mansi Kedia Carl Benedikt Frey Rajesh Bansal

Senior Fellow Professor of AI & Work, CEO, Reserve Bank
Oxford Internet Institute Innovation Hub

Aarti Reddy C. V. Madhukar Ravi Shankar Chaturvedi

Fellow CEO, Managing Director, Digital
Co-Develop Planet, Tufts University

Krithika Ramnath Helani Galpaya R. Chandrashekhar

Research Assistant CEO, Former Secretary,
LIRNEasia DoT and MeitY

Sruthi Vanguri Payal Arora Sehraj Singh

Research Assistant Professor, Inclusive AI Cultures, Managing Director (India)
Utrecht University Prosus
Table of Contents

Glossary 01

Acknowledgements 03

Executive Summary 05

01. New Digital Paradigm, New Digital Metrics 12

02. A New Digital World Atlas 18

03. Connect: Another Big Push 30

04. Harness: A New Story Emerging from the Global South 40

05. Innovate: Towards a Global Duopoly? 52

06. Protect and Sustain: Lurking Threats to Gains from Digitalisation 60

07. Afterword 70

08. Bibliography 76

09. Annexures 79
 Glossary

Glossary
Fifth-generation technology standard for
5G ID Identity Document
cellular networks

AI Artificial Intelligence IDI ICT Development Index

AIPI Artificial Intelligence Preparedness Index IMF International Monetary Fund

International Multilateral Partnership

AR/VR Augmented Reality/Virtual Reality IMPACT
Against Cyber Threats

CAGR Compound Annual Growth Rate IoT Internet of Things

Connect-Harness-Innovate-Protect-Sustain
CHIPS IT Information Technology
framework
Coalition for Digital Environmental
CODES ITU International Telecommunication Union
Sustainability

DeFi Decentralized Finance LLM Large Language Model

DPI Digital Public Infrastructure LLMOps Large Language Model Operations

eKYC Electronic Know-Your-Customer Mbps Megabits Per Second

Ministry of Electronics and Information

EGDI E-Government Development Index MeitY
Technology
Emerging Markets and Developing
EMDEs MSCI Morgan Stanley Capital International
Economies

Fintech Financial Technology NRI Network Readiness Index

Group of 7 countries, an intergovernmental

G7 OTT Over-the-top services/platforms
forum
Group of 20 countries, an
G20 PPP Purchasing Power Parity
intergovernmental forum
Group of 32 countries, as classified in SIDE
G32 R&D Research & Development
2025 Report

GB Gigabyte RoW Telecommunication Right of Way Rules

GDP Gross Domestic Product SHG Self-help group

GNI Gross National Income SIDE State of India’s Digital Economy Report

GPU Graphic Processing Unit SLM Small Language Model

Global System for Mobile Communications

GSMA UPI Unified Payment Interface
Association

HIC High Income Countries USD United States Dollar

Information and Communications

ICT VC Venture Capital
Technology

1
 Acknowledgements

Acknowledgements

We are grateful to our partner, Prosus, for their Palak Bhotika, Yukti Aggarwal and Neha Saini for
unwavering support of the ICRIER Prosus Centre helping enhance the visualisation of our analysis
for Internet and the Digital Economy (IPCIDE) and improving the overall aesthetics of this report.
and for backing the flagship report on the State We would also like to thank Krishna Printers for their
of India’s Digital Economy (SIDE) through its third prompt services and helping us present this report
iteration. We owe our gratitude to Sehraj Singh to you.
for his constant encouragement of our efforts and
research pursuits. We are appreciative of the time This report would not have been possible without
and effort invested by members of our advisory the behind-the-scenes support of Lubhanshi
board members to provide valuable guidance and Jain, Anvi Mehta, Sahil Pradhan, Neha Arora,
insights. Chhaya Singh, Janardhan Reddy, Rajkumar
Shahi, Rajesh Chaudhary and Riya Khanna, who
The analysis is built on data that was sourced from contributed significantly to the design, outreach,
numerous reports and databases. We extend our and administrative efforts. We would also like to
thanks to Kantar and Mordor Intelligence for making acknowledge the efforts of Alan Duerden and
important data available that helped bolster our Poonam Thakur from Prosus, for their support in
analysis as well as the team at CEIC, Tortoise Media planning the outreach for this report.
and Statista for providing timely clarifications. We
are grateful to our research colleagues in the Digital Finally, we are grateful to the readers of SIDE 2023
Economy, Startups and Innovation (DESI) team, and SIDE 2024, whose encouraging feedback has
especially, Payal Malik, Shiva Kanwar, Bhargavee been a major source of motivation to continue this
Das and Saloni Dhadwal for helping us put together work. The report and the underlying data used in
this report. preparing the report are available at ‘https://icrier.
org/ipcide/’ and at ‘https://icrier.org/publication/’.
We are also grateful to the many stakeholders who We would very much welcome your feedback on
welcomed us and participated in our SIDE 2024 the SIDE 2025 report. Please write to us at ipcide@
outreach events for their constructive feedback, icrier.res.in
including representatives from the World Bank,
RBI Innovation Hub, Government of Karnataka, All errors remain our own.
NASSCOM Executive Committee, Indian Institute of
Information Technology (IIIT)-Hyderabad, Kautilya
Public Policy Institute, and Takshashila University.

We extend our gratitude to our team of designers

from Litmus.ink, especially, Rahul Upadhyay,

3
 Executive Summary

Executive
Summary
Digitalisation in the AI age cannot be
measured with traditional metrics

Many global indices on digitalisation have Sustain (CHIPS) framework introduced in the State
consistently underestimated the digital potential of India’s Digital Economy (SIDE) 2023 report,
of large emerging markets. For example, IMF’s and fine-tuned in the SIDE 2024 report, provides a
Artificial Intelligence Preparedness Index (AIPI), realistic assessment of the global digital landscape
ITU’s ICT Development Index (IDI), United Nation’s (see Figure ES 1). Through a multi-layered structure,
E-Government Development Index (EGDI) and it better captures elements that define the breadth
Portulans Institute’s Network Readiness Index (NRI) and depth of digitalisation than that of traditional
have maintained that the developed countries global indices.
including European countries are digitally more
advanced than emerging markets such as Brazil, In this edition of SIDE, we make two important
China, India and Indonesia. With Deepseek in China, improvements. First, we merge the two indices
Aadhaar, world’s largest digital identity program introduced in SIDE 2024 – CHIPS Economy and
in India, Pix, an interoperable real time payments CHIPS User – to produce CHIPS Combined,
system in Brazil, digital wallets in Indonesia and which provides a single measure of the state
neobanking in Nigeria, developing countries are of digitalisation of a country. CHIPS Economy
not only moving from the margins to mainstream measures digitalisation at an aggregate level and
of digital innovation, they now accounting for the CHIPS User measures digitalisation at the level of a
global majority of internet and smartphone users, representative unit. CHIPS Economy is akin to the
making them an integral part of the global digital idea of measuring a country’s GDP and provides
economy. an estimate of the scale (breadth) of digitalisation.
CHIPS User can be understood as equivalent to
While digitalisation has altered the ways in which measuring the per capita income, assessing the
nations produce and consume, pathways to intensity (depth) of digitalisation at the unit level.
greater digitalisation have varied across countries. CHIPS Combined accounts in equal proportion
Global indices that often rely on the approaches for both, scale economies, as well as user-level
adopted by developed countries, overlooking outcomes. Second, we expand the list of countries
the unique pathways chosen by the developing to 32 from the 19 analysed in SIDE 2024.
world. The Connect–Harness–Innovate–Protect–

5
Executive Summary

Figure ES 1 The CHIPS 2025 Framework

14
SUB-PILLARS
47
INDICATORS

5
PILLARS
Access 5

Quality 2

Connect Affordability 4

C Apps & Platforms 6

Data Intensity 2
H Harness
Fintech 6

I Real Economy 2

Artificial Intelligence 3

P Innovate Investment & Startups 2

Emerging Tech 4

S Protect
Preparedness 2

Risk of Attack 2
Sustain
Commercialisation
5
of Green Tech

Green R&D 2

Source: ICRIER-Prosus Centre (IPCIDE)

6
 Executive Summary

India continues to be the third largest digitalised economy in the

world

Based on aggregate levels of digitalisation, as countries. Many of these countries enjoy the same
measured by CHIPS Economy, India ranks as the advantage as India in terms of having a relatively
third largest digitalised country in the world, behind higher GDP and larger population, though none
China and the US, and ahead of South Korea, UK, to the extent India does. An exception to the scale
and Singapore. India’s high rank should not come explanation is Singapore, which despite its modest
as a surprise to the close observer of its digital population, emerges as sixth largest digitalised
economy. It has the world’s second largest mobile nation in the world, largely on back of an affordable,
and internet network by number of users. Few high quality, innovative and secure digital
countries see data traffic per smartphone as high as ecosystem.
in India. The country has rolled out 5G faster than in
other countries, albeit from a low base. India is also India’s rank however precipitously falls to 28th
the global leader in terms of the volume of digital position on the relative scale, i.e., CHIPS User. This
transactions and export of ICT services. means while India as a country has achieved high
level digitalisation at the aggregate level, the level
The rise of India in the ranking table is part of a of digitalisation for the average Indian remains fairly
larger story of the rise of the Global South in the modest. On the flip-side, it implies that India has the
world’s digitalisation map. China, a close second potential to sharply increase its user-level ranking
to the United States, is the second most digitalised given its large under-connected population and
country in the world, when measured by CHIPS a rapidly growing digital economy. In fact, India’s
Economy. Brazil and Thailand are ranked 10th and digital economy is growing at twice the rate of its
12th respectively, and Nigeria is the 18th largest overall economy, and is expected to become one-
digitalised nation in the world, overtaking many G7 fifth of the economy by 2029.

India is placed eighth in the combined CHIPS ranking

India emerges as the eighth most digitalised nation effect, such as China, US and India, with those
among the G32 for CHIPS Combined. The top that have strong intensity (depth) effect, namely,
seven countries that are ahead of India are United Singapore, Korea and Denmark. Several large
States, China, Singapore, South Korea, Denmark, emerging markets and developing economies
United Kingdom and Germany (see Figure ES 2). (EMDEs) such as Brazil, Nigeria, and Indonesia,
The ranking of countries using CHIPS framework which performed well on CHIPS Economy, saw
varies considerably from what one would see in their ranking slide in CHIPS Combined, for the same
the traditional indices, as it includes a combination reason as that of India’s.
of countries that enjoy significant scale (breadth)

7
Executive Summary

Figure ES 2 India ranks third at the economy level, but eighth overall

Country CHIPS Economy CHIPS User CHIPS Combined

USA 68.5 61.4 64.5

CHN 62.5 52.0 56.1

IND 35.9 (Rank #3) 33.6 (#28) 34.7 (#8)

SNG 25.5 58.6 41.9

UK 25.4 48.1 35.1

SKO 25.4 53.8 39.6

FRA 24.9 41.1 32.9

GER 24.6 45.7 35.1

JAP 24.4 38.9 31.6

BRA 24.1 40.2 32.0

DEN 23.2 50.2 36.6

THA 23.0 38.0 30.6

CAN 22.3 45.3 33.7

SPA 21.9 43.1 32.4

IRE 21.8 45.8 33.4

NET 21.3 49.6 34.2

AUS 21.2 46.4 33.7

NIG 20.8 19.9 20.3

CHL 20.8 41.4 29.5

FIN 19.8 47.3 33.1

BEL 19.8 43.2 29.2

INS 19.7 28.3 24.0

MEX 19.5 36.4 26.5

ITA 19.5 37.6 28.5

RUS 19.1 34.7 26.9

CZE 18.6 41.9 28.8

TUR 17.7 38.8 26.8

SAR 17.1 43.5 30.3

SAF 16.9 31.7 24.3

EGY 16.9 29.7 21.6

COL 16.6 36.1 26.1

ARE 12.1 35.1 23.7

Source: ICRIER-Prosus Centre (IPCIDE)

8
 Executive Summary

Connect: The need for another Big Push

Despite considerable effort and investment, the While developing countries general rely on mobile
Connect pillar remains India’s Achilles heel ranking based internet networks as compared to the
18th among 32 countries in our sample (see Figure predominance of fixed line in developed countries,
ES 3). A true picture of contrast, India’s second in case of India, the imbalance between mobile and
largest network of internet and smartphone users broadband networks seems unusually high. In fact,
globally, coexists with over 40 percent non-users of India is the only country, other than Nigeria (in our
internet and over 50 percent without smartphones. sample) where the traffic flow on mobile networks
Being the country with the largest population gives is higher than the fixed network. While a mobile-
it unprecedented scale, but having the lowest per first network has helped accelerate adoption of
capita among G32 burdens it with a large share internet in India, the lack of a complementary
of unconnected population. However, things are fibre backbone risks resiliency and can adversely
looking up and are expected to improve significantly affect the country’s digital ambition. With some
in the coming years. Data from the recent ICUBE of the recently announced policy steps, India’s
survey finds that the growth of rural internet users communications network is likely to rebalance in
is twice that of urban internet users, and that favour of fixed line infrastructure.
for smartphone it is about 1.5 times, showing a
narrowing of digital divides.

Harness: The rise of the global south

Harness is India’s strongest pillar and it ranks IT services industry and the second largest exporter
third, following China and the US (see Figure ES globally, after Ireland.
3). In Harness, India’s highest score comes from
the Real Economy sub-pillar. This is on account of Other emerging economies also perform relatively
its high ICT services export and the third-highest well in Harness - Brazil ranks fourth in the apps and
market capitalisation of its IT sector, following US platform sub-pillar, Saudi Arabia is placed second
and China. Overall, India’s strong performance in data intensity, Nigeria ranks third in fintech and
in Harness is explained by its large and young Chile is among the top ten countries, both for
population, that is eager to adopt new technologies, apps and platform as well as data intensity. Users
increasing penetration of mobile internet, and of digital technologies in developing countries far
successful rollout of digital public infrastructures outnumber those in advanced economies. In the
(DPIs) such as Aadhaar, Unified Payment Interface last twelve months, for G20 countries, the number
(UPI) and Digilocker. See Annexure 5 for survey of users for e-commerce, video-on-demand, food
results on adoption of digital technologies by delivery and digital health in developing countries
India’s youth. Besides being a huge consumer of grew by 10.7 percent compared to 7.1 percent in
digital technologies and services, India is also a developed countries.
large producer – strong domestic foundations of an

9
Executive Summary

Innovate: Towards a global duopoly?

Home to the world’s tech giants, US remains the lowest per capita income in the group (see Figure
undisputed leader in digital innovation with a score ES 3). India performs particularly well (rank 4th)
that is twice as high as the next in line, China. The on investments and startups, reflecting its status
latter is rapidly evolving from being an imitator to as home to the third largest number of unicorns
becoming a lead innovator for frontier technologies. in the world, and continues to receive fairly large
Both countries have also taken a decisive lead in sums of venture capital funds. India is also a large
Artificial Intelligence (AI), compared to the rest of the consumer of decentralised finance (DeFi), but
world. They account for 70 percent of the valuation lags in adoption of other emerging technologies
of unicorns and 80 percent of venture capital (VC) such as Consumer IoT. Particularly worrying is
investments in AI across 32 countries in our sample. the finding that India lags in the AI sub-pillar (rank
US and China are also the leading adopters of 13th) resulting from low infrastructure availability
several emerging technologies - internet of things and lack of competing deep tech research. With
(IoT), metaverse, augmented and virtual reality (AR/ the government’s focus on the IndiaAI mission
VR). and several other complementary policies, the
country has an opportunity to truly own and power
India ranks 9th in the Innovation Pillar, which is indigenised AI models that can compete in global
impressive given that it is the country with the markets.

Protect and Sustain: Lurking threats to gains from digitalisation

A quick look at the combined scores for Protect and India however performs poorly on both pillars. In
Sustain (PS) Pillar suggest that the difference in the fact, PS is India’s poorest performing pillar in the
performance among countries is not as high as we CHIPS framework (see Figure ES 3). The overall
saw in the previous three pillars (Figure ES 2). That’s rank for India is 25th, and the lowest ranking sub-
the result of two opposing forces, with developed pillar is Preparedness (26th), followed by Green
countries scoring high on Protect and developing R&D (23rd). India’s large population gives it the
countries performing better on Sustain. Developed advantage of scale but also creates risk of cyber
countries with their longer history of digitalisation threats and environmental degradation due to
are not only more prone to cyberattacks, they rapid digitalisation. Concerted policy efforts will be
have also invested relatively more in safeguarding necessary to safeguard India’s digital ecosystem
their networks. On the other hand, developing from both these risks.
countries that are in the process of building digital
infrastructure have the opportunity to invest in
many new technologies that support greening of
digitalisation, including the adoption of life cycle
assessments that rationalise e-waste and energy
consumption.

10
 Executive Summary

Figure ES 3 Unpacking CHIPS Score by Pillars

85

81.0
77.1

68
66.1
64.5
62.9
60.1
56
Median 56.1
53.6
51 50.7

44.8

37
39.7 Median
36.3
34 34.7
33.7
32
29.3 Median
RUS

20
18.5 Median 20.3
NIG NIG
17
15.3

11
7.9 Median
EGY
2.6
THA
0
Connect Harness Innovate Protect + Sustain CHIPS

Source: ICRIER-Prosus Centre (IPCIDE)

CHIPS as a Policy Tool

CHIPS is not just a framework for measuring also possible within different country groupings –
digitalisation and ranking countries (or states, in a G20, BRICS, European Union and notable countries
sub-national context) on their relative performance, from ASEAN, Latin America and Africa. In the report,
it can be a useful diagnostic tool for policymakers to we provide illustrative examples of how CHIPS can
identify gaps and design interventions. In a macro be used as a diagnostic tool using Digital Heatmaps,
sense, the framework helps benchmark a country to Digital Diffusion Pyramids and Digital Drill Downs.
world frontiers and world averages. Comparison is

11
01. New Digital Paradigm, New Digital Metrics

01

Introduction

12
 01. New Digital Paradigm, New Digital Metrics

New Digital Paradigm, New Digital Metrics

1.1. Digitalisation in the AI age cannot be measured with traditional

metrics

Digital potential of developing markets is missing overlooking the network or aggregate effect of
in popular global indices. In mid-2024, the digitalisation, thereby overlooking the economies
International Monetary Fund (IMF) released their of scale that large developing countries enjoy with
Artificial Intelligence Preparedness Index (AIPI) regard to internet users, volume of transactions
that assessed the level of AI readiness across 174 and data; (ii) focusing on selective aspects of
countries. It ranked China at 30, while placing digitalisation and lacking a comprehensive view
seven developed countries in the top 10 - Denmark of digitalisation that includes not only harnessing
(2), Netherlands (4), Estonia (5), Finland (6), technology for development, but also protecting
Switzerland (7), Germany (9) and Sweden (10).1 users from digital harms and building sustainable
No wonder when news broke that Deepseek, a digital networks; and (iii) suffering from double
Chinese AI startup, had launched an affordable counting, namely including both outcomes and
AI chatbot that matched OpenAI’s ChatGPT, the inputs (enablers) of digitalisation in the index,
world went into a meltdown.2 Many global indices thereby amplifying the difference between strong
on digitalisation like the one from the IMF have and weak performers.
consistently underestimated the digital potential
of large emerging markets such as Brazil, China, With developing countries moving from the margins
India and Indonesia, while maintaining that the to mainstream of digital innovation, indices that put
developed countries including European countries Global North at the top, can be said to be, behind
are digitally more advanced. Metrics developed times. India, South Africa and other developing
for measurement in the early days of telecom countries are leveraging the Airfibre technology
and internet – the ICT Development Index (IDI) that relies on wireless radio frequency signals to
by International Telecommunication Union (ITU), transmit data through the air. It is cheaper than
E-Government Development Index (EGDI) by laying down fibre and provides flexible solutions for
United Nations, and Network Readiness Index (NRI) connectivity in remote areas.5 Developing countries
by the Portulans Institute (formerly World Economic like India with their Unified Payments Interface
Forum) – despite their periodic revisions, continue and the upcoming Unified Lending Interface,
to drive the perception that high-income-countries Brazil with Pix and Nigeria with their neo-banking
(HICs), including Small HICs are digitally ahead and solutions, are all examples of ground-up innovation
contribute more to global digital innovation.3 to address the challenge of financial exclusion.6
Deepseek, mentioned above, is a Large Language
The methodological flaws in these rankings Model (LLM) that uses significantly lower compute
were discussed in SIDE 2024.4 These include: (i) power, but matches the accuracy of top of the

1
International Monetary Fund. (2024). AI Preparedness Index (AIPI).
2
Ng, K., Drenon, B., Gerken, T., & Cieslak, M. (2025, February 04). DeepSeek: The Chinese AI app that has the world talking. BBC.
3
EGDI was first published in 2001 NRI was launched in 2002. The first edition of IDI dates back to 2009. While these indices have been
redesigned subsequently, their approach to measuring digitalisation continues to be narrow and overlooks technological innovation that
enable developing countries to leapfrog
4
Mishra, D., Kedia, M., Reddy, A., Ramnath, K., & Manish, M. (2024, February 16). State of India’s Digital Economy 2024. ICRIER.
5
All Tech Magazine. (2024, April 06). What is Air Fiber Internet Technology and How it Works?
6
Chandra, K., Jayakrishnan, A., Fernandes, R B., Paulo, C B., Boechat, P., & Kashyap, S. (2024, September 20). From Brasilia to Bombay: The
unlikely twins leading a global open finance revolution. Centre for Digital Public Infrastructure.

13
01. New Digital Paradigm, New Digital Metrics

table LLM enabled chatbots provided by American has altered the ways in which nations produce and
tech companies. Along with important innovation consume, the approach to digitalisation has also
breakthroughs, developing countries now account varied by countries. These non-linearities are often
for majority of internet users, smartphone owners, missing in computation of global indices which rely
and social media consumers, making them an more on the approaches adopted by developed
integral part of the global digital economy. countries. Mario Draghi’s recent report highlights
the declining competitiveness of European
Technological advancements have helped businesses and explains how many factors that
developing nations leapfrog and challenge well- supported growth in the past are unlikely to provide
understood growth trajectories. While digitalisation momentum to their economies in the future.7

1.2. A new way to measure digitalisation: The CHIPS framework

The Connect – Harness – Innovate – Protect – This structure allows for the framework to be used
Sustain (CHIPS) framework introduced in the modularly to compare pillars in isolation, as well as
State of India’s Digital Economy (SIDE) 2023 a comprehensive overview of overall digitalisation.
report, provides a comprehensive assessment of The indicators included attempt to capture different
the digital ecosystem. Through a multi-layered aspects of digitalisation as experienced by a range
structure (see Figure 1.1) it captures elements that of stakeholders including individuals, businesses,
define the breadth and depth of digitalisation. The and governments, with the most updated data
five pillars measure the entire spectrum of digital available.
transformation. The ‘Connect’ pillar measures
all aspects of meaningful connectivity – access, Similar to SIDE 2024, we have two versions of the
affordability, and quality, as defined by the ITU.8 The index – CHIPS Economy and CHIPS User. CHIPS
‘Harness’ pillar captures how digital technologies Economy measures digitalisation at an aggregate
are being used and leveraged for various purposes level and CHIPS User measures digitalisation at
and its contribution to the economy. The ‘Innovate’ the level of a representative unit.9 CHIPS Economy
pillar covers indicators related to the adoption and is akin to the idea of measuring a country’s GDP
development of AI and other emerging technologies, and provides an estimate of the scale (breadth) of
as well as the start-up ecosystem. The fourth pillar, digitalisation. CHIPS User can be understood as
‘Protect,’ measures a country’s preparedness equivalent to measuring the per capita income,
against and vulnerability to cybercrimes, and the assessing the intensity (depth) of digitalisation at
risk of attacks and breaches. The ‘Sustain’ pillar the unit level. This year we also combine the two to
measures efforts towards adopting environmentally produce CHIPS Combined, which provides a single
sustainable digital technologies as well as the use measure of the state of digitalisation of the country.
of digital technologies to promote environmental CHIPS Combined accounts in equal proportion
sustainability. for both, scale economies, as well as user-level
outcomes.
Each pillar is sub-divided into sub-pillars and each
sub-pillar is measured using two or more indicators.

7
Draghi, M. (2024, September 09). The future of European competitiveness: Report by Mario Draghi. European Commission.
8
International Telecommunication Union. (2022). Global Connectivity Report 2022.
9
The unit varies depending on the indicator. In majority of cases, it is the average user and in other cases it is the average firm or enterprise or
average investment or equity prices.

14
 01. New Digital Paradigm, New Digital Metrics

Fig. 1.1 CHIPS Framework 2025

14
SUB-PILLARS
47
INDICATORS

5
PILLARS
Access 5

Quality 2

Connect Affordability 4

C Apps & Platforms 6

Data Intensity 2
H Harness
Fintech 6

I Real Economy 2

Artificial Intelligence 3

P Innovate Investment & Startups 2

Emerging Tech 4

S Protect
Preparedness 2

Risk of Attack 2
Sustain
Commercialisation
5
of Green Tech

Green R&D 2

Source: ICRIER-Prosus Centre (IPCIDE)

CHIPS Economy and CHIPS User are based on absolute and relative indicators. Each indicator is
identical indicators. The difference is CHIPS standardised in order to enable comparison, and
Economy is an absolute measure while those in aggregation into the index. A total of 47 indicators
CHIPS User are normalised by relevant macro are grouped into 14 sub-pillars, which aggregate
indicators including population, number of internet to the 5 pillars of CHIPS. Detailed methodology is
users, GDP, etc. To provide an example, for CHIPS provided in Annexure 2.
Economy the indicator for internet users is the total
number of internet users in a country, while for CHIPS SIDE 2025 makes two important improvements
User it is the share of internet users in population. over SIDE 2024. First, it introduces the concept of
For CHIPS Combined we use a combination of CHIPS-Combined – a single summary measure of

15
01. New Digital Paradigm, New Digital Metrics

digitalisation for each country –to enable easier representation. The total of 32 countries under
cross-country comparison. Second, it includes 13 consideration comprise 66 percent of the global
new countries in addition to 19 G20 countries that population, 72 percent share of global internet
were assessed and ranked in SIDE 2024. These users and 84 percent of mobile subscribers. See
13 countries were selected based on the size Box 1.1 for more details on the selection process for
of their GDP as well as population and regional new countries.

Box 1.1: Selection of 32 countries (G32) for SIDE 2025

To expand the list of countries for assessment, we added to the existing list of 19 countries from the
G20 to include 13 more. The selection was based on the following criteria:

• Belongs to the top 60 countries in the world by GDP PPP (2023)

• Minimum population of 15 million (2023)
• Regional representation
• Data available for at least 85 percent of indicators included in the CHIPS framework

The following 13 countries met the above criteria, and along with the 19 countries, form the Group of
32 countries: Africa (Nigeria, Egypt), Asia (Singapore, Thailand), Europe (Belgium, Czechia, Denmark,
Finland, Ireland, Netherlands, Spain), Latin America (Chile, Colombia)

Russia
Canada France
Denmark

United Kingdom Finland

Ireland
Belgium Netherlands
Czechia Japan
United States Italy
Spain Turkey
South Korea
Germany Saudi Arabia
China
Mexico
Thailand
Nigeria India
Colombia
Singapore
Egypt
Indonesia
Brazil

Chile

South Africa
Australia
Argentina

G20 countries
13 new countries

16
 01. New Digital Paradigm, New Digital Metrics

To ensure contemporary relevance of the CHIPS have also been reorganised, reducing the number
framework, we had to make three changes: changing of sub-pillars from 16 to 14 and indicators from 50
sub-pillars; replacing indicators with more relevant to 47 for both CHIPS Economy and CHIPS User. The
ones, and changing the weights to ensure internal changes in SIDE 2025 are summarised in Box 1.2.
consistency (see Box 1.2). We replaced indicators However, for continuity of comparison the 2024
under the AI sub-pillar to better capture the quality series for G20 countries has been recreated with old
of infrastructure and research outputs, which were indicators. While G32 and CHIPS 2025 are the main
missing in SIDE 2024. We also used newer data, focus of this report, we do provide comparisons for
where available, replacing 2024 or 2023 data with the G20 countries between 2024 and 2025 using
more up-to-date numbers. Additionally, sub-pillars the old data set.

Box 1.2: Changes in CHIPS 2025

Change in Sub-pillars
• We dropped the Trust sub-pillar from Protect as data for the expanded list of countries was not available
from the original survey source used in SIDE 2024
• Fintech Public and Fintech Private sub-pillars, were combined into a single Fintech sub-pillar. Since
the new Findex data (as sourced from the Global Findex Database, World Bank) is still to become
available, we reduced the weights and combined data from the existing Findex into a single sub-pillar

Change in Indicators
• Indicators in the AI sub-pillar for Innovate were changed. AI publications and contributions to GitHub
AI projects were both dropped given their narrow scope and replaced with the sub-index score for
Research in AI from Tortoise Media’s latest Global AI Index
• The score for Infrastructure for AI was also added from Tortoise Media’s Global AI Index as another
indicator under the AI sub-pillar. While Infrastructure is usually thought of as an input, given the
evolving nature of AI, the capacity to compute and run AI models and applications are being used as
outputs, at least intermittently
• ICT value added was changed to IT market capitalisation, given the lack of credible data on ICT value
added for most countries. Since there is no clear definition of ICT value added, countries exercise
discretion in measurement, making the estimates incomparable. ICT market capitalisation has been
estimated from the MSCI ICT sectoral weights for individual countries (as sourced from Morgan
Stanley Capital International (MSCI) Index)
• Cybersecurity spending was changed to cybersecurity revenue. Source previously used for cyber
security spending did not have data for several countries in the expanded G32. Cyber security revenue
data is from Statista
• Number of startups as a percent of ICT value added has now been normalised as number of startups
per number of listed companies. This was due to the lack of authenticity and comparability in ICT
value added data
• Indicator on cyber security patents has been dropped due to unavailability of data for several countries
in G32

Change in Weights
• The weight assigned to an indicator is reduced to half, if the previous year value is used. This is
applicable to five indicators in G32 and six indicators and one sub-pillar in G20. Details available
in Annexure 2

17
02. A New Digital World Atlas

02

Global
Ranking

18
 02. A New Digital World Atlas

A New Digital World Atlas

2.1. India continues to be the third largest digitalised economy in the

world

Based on aggregate levels of digitalisation, as indicators where India performed well (e.g.,
measured by CHIPS Economy, India ranks as the contribution to AI GitHub) with ones where it is
third largest digitalised country in the world, behind lagging behind (e.g., AI research) – is reassuring
China and the US, and ahead of South Korea, UK, of India’s digital potential (see left column, Figure
and Singapore. The fact that India has maintained 2.1). Moreover, India’s third position is unlikely to be
its third position from SIDE 2024, despite two challenged anytime soon given the large difference
notable changes in the framework – expansion of in its score vis-à-vis countries that are ranked below
the sample from 19 to 32 countries and replacing her.

Fig 2.1 India ranks third at the economy level, but eighth overall

Country CHIPS Economy CHIPS User CHIPS Combined

USA 68.5 61.4 64.5

CHN 62.5 52.0 56.1
IND 35.9 (Rank #3) 33.6 (#28) 34.7 (#8)

SNG 25.5 58.6 41.9

UK 25.4 48.1 35.1
SKO 25.4 53.8 39.6
FRA 24.9 41.1 32.9
GER 24.6 45.7 35.1
JAP 24.4 38.9 31.6
BRA 24.1 40.2 32.0
DEN 23.2 50.2 36.6
THA 23.0 38.0 30.6
CAN 22.3 45.3 33.7
SPA 21.9 43.1 32.4
IRE 21.8 45.8 33.4
NET 21.3 49.6 34.2
AUS 21.2 46.4 33.7
NIG 20.8 19.9 20.3
CHL 20.8 41.4 29.5
FIN 19.8 47.3 33.1
BEL 19.8 43.2 29.2
INS 19.7 28.3 24.0
MEX 19.5 36.4 26.5
ITA 19.5 37.6 28.5
RUS 19.1 34.7 26.9
CZE 18.6 41.9 28.8
TUR 17.7 38.8 26.8
SAR 17.1 43.5 30.3
SAF 16.9 31.7 24.3
EGY 16.9 29.7 21.6
COL 16.6 36.1 26.1
ARE 12.1 35.1 23.7

Source: ICRIER-Prosus Centre (IPCIDE) 19

02. A New Digital World Atlas

India’s high rank should not come as a surprise the extent that of India. An exception to the scale
to the close observer of its digital economy. It has explanation is Singapore, which despite its modest
the world’s second largest mobile and internet population, emerges as sixth largest digitalised
network by number of users. Few countries see nation in the world, largely on back of an affordable,
data traffic per smartphone as high as it is in India. high quality, innovative and secure digital
The country has rolled out 5G faster than in other ecosystem. Singapore’s performance is discussed
countries, albeit from a low base. It is also the global in more detail in the subsequent chapters.
leader in terms of the volume of digital transactions
and export of ICT services. India has become the India’s rank however precipitously falls to 28th
largest contributor to global GitHub AI project, and position on the relative scale, i.e., CHIPS User. This
ranks third in the number of homegrown unicorns. means while India as a country has achieved high
During its G20 Presidency, India was recognised level digitalisation at the aggregate level, the level
as the champion of digital public infrastructures of digitalisation for the average Indian remains
(DPIs) and is also seen as a well-established digital fairly modest. The only four countries that perform
powerhouse. Many of these aspects are further worse that India are Egypt, Indonesia, Nigeria and
unpacked in the ensuing chapters. South Africa (see centre column, Figure 2.1). While
the addition of new countries and new indicators
Importantly, the rise of India in the ranking table is didn’t affect India’s ranking for CHIPS Economy,
part of a larger story of the rise of the Global South in it significantly altered its position in CHIPS User.11
the world’s digitalisation map. China, a close second This is because the user-level scores are clustered
to the United States, is the second most digitalised around a small range, and a small change in score
country in the world, when measured by CHIPS can have a large change in rank. This also implies
Economy. Brazil and Thailand are ranked 10th and that India has the potential to sharply increase its
12th respectively, and Nigeria is the 18th largest user-level ranking given its large under-connected
digitalised nation in the world, overtaking many G7 population and a rapidly growing digital economy.
countries.10 Many of these countries enjoy the same In fact, India’s digital economy is growing at twice
advantage as India in terms of having a relatively the rate of its overall economy, and is expected to
higher GDP and larger population, though none to become one-fifth of the economy by 2029.12

2.2. India is placed eighth in the combined CHIPS ranking

While CHIPS Economy and CHIPS User provide among the G32 for CHIPS Combined. The top
different lenses to view the digital economy, for a seven countries that are ahead of India are United
complete overview and assessment, a combined States, China, Singapore, South Korea, Denmark,
perspective is necessary. This is the first time we United Kingdom and Germany (see right column,
are reporting the CHIPS Combined score. India Figure 2.1). The ranking of countries using CHIPS
emerges as the eighth most digitalised nation framework varies considerably from what one

10
Our sample consists of some of the largest (by GDP and population) and richest countries in the world. It is unlikely that any of the countries
that are not included in our sample would be more digitalised than these 32 countries. Therefore, we often loosely describe a country’s ranking
as Xth in the world, even if it is Xth among the G32 countries.
11
In 2024, India was placed 12th in the CHIPS User table among the G20 countries.
12
ICRIER. (2025, January 22). Estimation and Measurement of India’s Digital Economy. Ministry of Electronics and Information Technology

20
 02. A New Digital World Atlas

would see in the traditional indices, as it includes stands overall third with its high performance on
a combination of countries that enjoy significant the relative scale. Out of the top countries, four are
scale (breadth) effect, such as China, US, and India, from Asia (China, India, Singapore and South Korea)
with those that have strong intensity (depth) effect, and only three from continental Europe (Denmark,
namely, Singapore, Korea, and Denmark. Germany and Netherlands). Several large emerging
markets and developing economies (EMDEs) such
The CHIPS Combined ranking holds many as Brazil, Nigeria, and Indonesia, which performed
interesting insights. First, the US, continues to lead well on CHIPS Economy, saw their ranking slide in
the global digital economy with a high score in CHIPS CHIPS Combined, for the same reason as that of
Economy, but a much higher score in CHIPS User, India’s. As shown in Figure 2.2, large EMDEs that are
compared to China. China falls behind Singapore at par, or slightly ahead of developed countries in
and South Korea in CHIPS User, but emerges CHIPS Economy, lose out due to their significantly
second in CHIPS Combined due to the gains in lower score in CHIPS User.
CHIPS Economy. Singapore, a non-G20 country,

Fig. 2.2 Developed countries gain from their relatively higher score in CHIPS User

Developing Countries Developed Countries

70

60 SNG USA
ine
°L
SKO 45
50 NET
DEN
FIN AUS UK CHN
BEL IRE GER
CAN
CHIPS User Score

SAR SPA
40 CZE FRA
CHL
TUR ITA JAP BRA
COL MEX THA
ARG
SAF RUS IND
30 EGY INS

20 NIG

10

0
0 10 20 30 40 50 60 70

CHIPS Economy Score

Source: ICRIER-Prosus Centre (IPCIDE)

21
02. A New Digital World Atlas

Box 2.1: What matters most Fig. 2.3 Correlation of CHIPS Economy with
for digitalisation: Aggregate macro variables

income, per capita income or GDP per capita

population? 80

70
Unlike most other global indices on the
60
digital economy which correlate with per

CHIPS Economy Score

capita income, we observe that scores in 50
CHIPS Economy are driven much more by the
40
population and overall size of economy (GDP)
R2 = 0.0353
than per capita income (see Figure 2.3). US, 30
China and India, and in that order, outshine
20
all other countries in the absolute score. The
elevated scores of India are likely to be driven 10
by the size of the population, while that for US 0
by the size of the economy. In case of China, it - 20,000 40,000 60,000 80,000 1,00,000
has an advantage in both. GDP per capita (USD)

On the other hand, scores for CHIPS User are GDP

80
rangebound, and correlates most with per
capita income, following the trend of most 70
global indices. However, once China and US are 60
CHIPS Economy Score

included in the set of countries, the correlation R2 = 0.8965

with GDP improves (see Figure 2.4). 50

40
CHIPS Combined aggregates indicators
from CHIPS Economy and CHIPS User, using 30

appropriate weights and correlates well 20

with GDP (see Figure 2.5). Using the CHIPS
10
framework, therefore, helps overcome a
shortcoming of other global indices, as the 0
- 5,000 10,000 15,000 20,000 25,000 30,000
latter do not account for gains from the size of
Current GDP (USD)
digital networks that are defined by the number
of users or by the size of the industry. Since
Population
speed of digitalisation is driven both by the
80
breadth and depth of adoption, i.e., the size of
networks is as important as the level of use by 70
an individual, CHIPS Combined does a better
60
CHIPS Economy Score

job in measuring the level of digitalisation. The

below scatter plots reveal that India’s eighth 50
rank is not so much because of its population 40 R2 = 0.4176
advantage but also because of the size of its
economy (US$ 3.9 trillion GDP in 2024). 30

20

10

0
- 200 400 600 800 1,000 1,200 1,400 1,600
Source: ICRIER-Prosus Centre (IPCIDE) Population (millions)

22
 02. A New Digital World Atlas

Fig. 2.4 Correlation of CHIPS User with macro Fig. 2.5 Correlation of CHIPS Combined with
variables macro variables

GDP per capita GDP per capita

70 70

R2 = 0.5339
60 60

CHIPS Combined Score

50 50
R2 = 0.2344
CHIPS User Score

40 40

30 30

20 20

10 10

0 0
- 20,000 40,000 60,000 80,000 1,00,000 - 20,000 40,000 60,000 80,000 1,00,000
GDP per capita (USD) GDP per capita (USD)

GDP GDP
70 70

60 60

R2 = 0.2202 R2 = 0.7199
CHIPS Combined Score

50 50
CHIPS User Score

40 40

30 30

20 20

10 10

0 0
- 5,000 10,000 15,000 20,000 25,000 30,000 - 5,000 10,000 15,000 20,000 25,000 30,000

Current GDP (USD) Current GDP (USD)

Population Population
70 70
R2 = 0.0013 R2 = 0.1649
60 60

50
CHIPS Combined Score

50
CHIPS User Score

40 40

30 30

20 20

10 10

0 0
- 200 400 600 800 1,000 1,200 1,400 1,600 - 200 400 600 800 1,000 1,200 1,400 1,600
Population (millions) Population (millions)

23
02. A New Digital World Atlas

2.3. Unpacking pillars: India’s strongest performance is in Harness

and weakest in Protect and Sustain

Unpacking the pillar scores reveals many interesting There is considerable variation in outcomes
patterns. First, there is a great deal of variation in the between the frontier country, the median country
performance of countries across pillars, justifying and the poorest performing country across most
our approach to take a more holistic approach to pillars, especially in I. The domination of the United
measuring digitalisation. While the US defines the States and China in emerging tech – such as AI, IoT,
frontier for Innovate (I) and Protect + Sustain (PS) Metaverse, AR/VR – shows inadequate diffusion
pillars, it falls to second position in Harness (H) and of technologies and practices to other countries.
further to 6th position in Connect (C) pillar.13 China’s With the announcement of the Framework for
ranking is more uniform across pillars, with top billing Artificial Intelligence Diffusion, in January 2025, the
in C and H, and second position in I and PS pillars. US government is seemingly carving out a path to
The same applies to Singapore and South Korea, maintain control over how other countries access
the two Asian countries that perform consistently and deploy AI.14 While the leadership of US and
well across all pillars. In contrast, France, a country increasingly China, is somewhat undeniable in the
that recently co-hosted the AI Action Summit with short run, long term global dynamics is something
India, exhibits inconsistent performance across to watch out for. The launch of Deepseek and the
pillars, with rankings of 7th, 25th, 10th, and 22nd possibility of low-cost innovation has at least shifted
in C, H, I and PS pillars respectively. The same story the focus in India from startups building new AI
holds for Germany, whose ranking of 4 (PS), 6 (I), 12 apps to LLMOps, that help other companies build
(H) and 18 (C) are quite erratic across pillars. with GenAI, i.e., startups that work with existing
models to help enterprises build local solutions.15
Besides the US and China that uniformly outperform However, the more transformational opportunities
in all pillars of the CHIPS, India’s overall score is to build models and enable widespread adoption
positively impacted by H. Its score in C as well as is likely to come from stronger global partnerships
PS, drag the overall score (see Figure 2.6). For other among likeminded nations and public investment
countries too, the scores are not balanced across in building both AI infrastructure and talent.16
the pillars, especially where the frontiers are at a
distance from the median countries. For example, Finally, while PS pillar appears less dispersed than
the Innovate pillar, where the maximum score is 81 I, the risks of countries being left behind is real. This
(US) and the minimum is 2.6 (Thailand). The lowest should also be an area of global cooperation, already
variation is in the PS pillar – emerging risks, areas becoming visible through the Coalition for Digital
where policy and performance are still evolving. In Environmental Sustainability (CODES) anchored
the following chapters we will decompose CHIPS to by UN Environment Program on sustainable
highlight key global trends as well as those for India digitalisation and ITU’s Global Cyber Security
across each pillar. Agenda and International Multilateral Partnership
Against Cyber Threats (IMPACT) on Protect.

13
The Protect (P) and Sustain (S) Pillars have been combined into a single group Protect + Sustain (PS) for two reasons. First, both pillars are
conceptually similar as they deal with risks emanating from rapid digitalisation. Second, the quality of data available for these two pillars are
not as good as for the other three pillars, and so the combined weights assigned to these two pillars is same as for each of the other individual
pillar.
14
Heim, L. (2025, January). Understanding the Artificial Intelligence Diffusion Framework. RAND
15
G, A. (2025, February 17). Deepseek cracked open AI. India’s AI plumbers are loving it. The Ken.
16
Gazzane, S., & Li, C. (2025, January 21). How can all nations realize the full potential of AI? World Economic Forum.

24
 02. A New Digital World Atlas

Fig. 2.6 Unpacking CHIPS Score by Pillars

85

81.0

77.1

68
66.1
64.5
62.9
60.1
56
Median 56.1
53.6
51 50.7

44.8

37
39.7 Median

36.3
34.7
34 33.7
32
29.3 Median
RUS

20
18.5 Median 20.3

NIG NIG
17
15.3

11
7.9 Median
EGY
2.6
THA
0

Connect Harness Innovate Protect + Sustain CHIPS

Source: ICRIER-Prosus Centre (IPCIDE)

17
Specifically, we replaced indicators on AI patents and GitHub contribution, with AI infrastructure and AI research output.

25
02. A New Digital World Atlas

2.4. India’s continued improvement among the G20 countries

It is worth reminding the readers why India ranks performance is considerably weaker in both the
above South Korea in the CHIPS Combined in new indicators compared to the replaced ones.
G20 but below South Korea in G32. As discussed Therefore, India’s ranking falls below South Korea
in Chapter 1, in SIDE 2025, we replaced the two when we use the new indicators. But we use the old
indicators under the AI sub-pillar that are broader data set when comparing performance for the G20
in scope and considerably more representative countries between 2024 and 2025, where India
of AI capabilities.17 But it turns out that India’s continues to perform better than South Korea.

Fig. 2.7 India’s improving performance within the G20 in CHIPS Combined

90

USA
CHN
80

70

60

50

IND
40
SKO
UK
FRA
CAN
30 GER
AUS
BRA
SAR
20 JAP
ITA
TUR
MEX
RUS
10 INS
SAF

ARG
0
2024 2025

Source: ICRIER-Prosus Centre (IPCIDE)

26
 02. A New Digital World Atlas

2.5. Not all forms of digitalisation improved between 2024 and 2025

Given the euphoria surrounding digital of the 39 indicators for which data are available
technologies, one would expect that all forms of for both 2023 and 2024, we find that almost one-
digitalisation must be improving over time. If not fifth of indicators declined in average value for
every country, one would expect that the average CHIPS Economy and about one-third for CHIPS
for all countries and the frontier countries should user, between the two periods (see Figure 2.8).
show positive change. But surprisingly, that’s not Additionally, for CHIPS economy the deterioration
the case, with several indicators of digitalisation in number of indicators is higher for countries at the
deteriorating in value in the past one year. Out frontier than the median value for all countries.

Fig. 2.8 Comparing changes in digital diffusion

For the median country

2.0
Ratio between Indicator values of SIDE 2025 to 2024

1.5
8 : 31
14:25

1.0

0.5

0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

Indicators of digitalisation

Median (CHIPS Economy) Median (CHIPS User)

27
 02. A New Digital World Atlas

Fig. 2.8 (Contd.) Comparing changes in digital diffusion

For the frontier country

2.0
Ratio between Indicator values of SIDE 2025 to 2024

1.5 10:29

13:26

1.0

0.5

0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

Indicators of digitalisation

Frontier (CHIPS Economy) Frontier (CHIPS User)

Source: ICRIER-Prosus Centre (IPCIDE)

Some of the largest improvements and the biggest improvement was the reduction in
deteriorations have come from the I and PS pillars. the number of email leaks per user, which fell by
Between 2023 and 2024, DeFi revenues collapsed 92 percent.18 Many of the indicators for C showed
by 82 percent and unicorn valuations dropped improvement; these include mobile broadband
by 18 percent. Similarly, revenues from energy speeds and mobile traffic, number of secure servers,
management software and green data centres value of neobanking transactions, etc. (see Figure
and patent for sustainable electronics fell by 51, 2.9).
42 and 27 percent respectively. On the other hand,

18
Only five of 19 G20 countries saw an increase in emails leaks. These include Russia, China, United States, Germany and Japan

28
 02. A New Digital World Atlas

Fig. 2.9 The largest reversals have been in innovation and sustainability pillars
(Based on change in median value of indicators under CHIPS User )
-82.1% Defi revenue Connect
Harness
-50.9% Energy management and EHS
Innovate
-42.4% Sustainable electronics
Protect
-26.9% Green data centres
Sustain
-24.3% ICT in electromobility patents

-17.8% Unicorn valuation

-8.8% Contributions to Global Al Projects

-7.9% ICT service exports

-5.3% Digital gender gap

-4.1% E-waste generation

-2.3% Mobile app downloads

-0.1% Consumer IOT revenue

0% Population covered by LTE

Metaverse revenue 0.01%
Fixed broadband internet traffic 0.6%
Price of mobile data (HC) 1.2%
Smart grid patents 1.6%
E-commerce users 3.5%
Digital food delivery users 3.8%
Startups 4.3%
Ransomware attacks 5.2%
Video-on-demand users 5.7%
Smartphone users 6.4%
Digital health users 7.6%
Internet users 8.0%
Social media usage for work 10.0%
Price of mobile data (LC) 10.0%
EHS software 10.0%
Price of fixed broadband internet 11.3%
Fixed Download Speeds 15.0%
ICT Value Added 15.5%
Digital payments value 16.1%
AR/VR revenue 18.7%
Mobile Download Speeds 21.0%
Secure servers 26.4%
Mobile broadband internet traffic 38.0%
Neobanking transaction value 39.2%
Al publications 57.7%
Email leaks 91.8%
-100% -75% -50% -25% 0% 25% 50% 75% 100%

Source: ICRIER-Prosus Centre (IPCIDE)

Note: The indicators showing positive change reflect an improvement in performance and those showing negative change reflect decline in performance. For
indicators like email leaks, ransomware attacks, price of mobile and broadband services, e-waste and gender gap, a positive change is an improvement or a
decline in attaks, leaks, prices, etc.

29
03. Connect: Another Big Push

03

Connect

30
 03. Connect: Another Big Push

Connect: Another Big Push

3.1. Countries playing to their strengths

China has emerged as the most connected country that of urban internet users, and that for smartphone
in the world, ahead of its developed country peers. users is about 1.5 times showing a narrowing of
China’s strong performance across the sub-pillars divides (discussed in Section 3.5). Much of the
of affordability, quality and access, has catapulted divide in internet adoption as highlighted by GSMA
it to the top rank in the Connect pillar (see Figure emerges from a usage gap – population that lives
3.1). It stands out in access with the largest network within reach of a mobile broadband network but do
of internet and smartphone users in the world. not or cannot afford to use the internet. This is likely
Singapore and Denmark, are a close second and to narrow with some policy support and India’s
third, respectively. They gain from their exceptional rising income.19
performance in quality. Singapore’s average fixed
broadband download speed at 312 Mbps is the Connectivity, which carries the highest weight
highest among the group of 32 (G32) countries and among the traditional indices on digitalisation,
twice as high as the group median. On the other is one where developing countries generally
hand, Denmark’s average mobile download speed perform poorly.20 This also resonates with results
close to 150 Mbps is almost three times more than of our Connect pillar. For example, among the top
the median. Singapore is also the most affordable ten countries in the Connect pillar, only two are
for mobile broadband when measured as a share of developing countries, namely China and Chile, and
per capita income and China for fixed broadband both countries are categorised as upper-middle-
services. -income by the World Bank. Similarly, among the
bottom 10 countries in the Connect pillar, nine
Despite considerable effort and investment, the are developing countries, with Italy being the
Connect pillar remains India’s Achilles’ heel. A true exception. While developing countries have found
picture of contrast, India’s second largest network ways to make internet accessible and affordable
of internet and smartphone users globally, coexists by liberalising their telecom sector, appointing
with over 40 percent non-users of internet and over independent telecom regulators, and the private
50 percent without smartphones. Being the country sector responding through cheaper data and
with the largest population gives it unprecedented voice plans and less expensive smart phones, they
scale, but having the lowest per capita among still have a lot to catch up on. Besides closing the
G32 burdens it with a large share of unconnected access gap, quality of connectivity and affordability
population. Consequently, India is ranked 18 in the will continue to remain challenging, as demand for
Connect pillar, slightly below the overall median data-intensive applications will grow in the future.
score. This is also true for the three sub-pillars under Well-regulated burden sharing arrangements
Connect. However, things are looking up and are between private telecom players and the internet
expected to improve significantly in the coming companies, along with some fiscal support will help
years. Data from the recent ICUBE survey on India, fund the next upgrade of infrastructure in these
finds that the increase in rural internet users is twice countries.

19
Okeleke, K., & Nayak, N. (2022, September). India: On the road to a digital nation. GSMA.
20
For example, ITU’s ICT Development Index is entirely based on indicators that measure connectivity

31
03. Connect: Another Big Push

Fig. 3.1 Connect is India’s Achilles’ heel

Pillar Sub-Pillar

Country Connect Affordability Quality Access

CHN 77.1 85.5 66.4 81.6

SNG 76.5 87.1 90.1 54.6

DEN 73.3 85.0 85.3 51.7

NET 69.8 85.5 76.2 49.8

SKO 67.8 75.7 73.5 56.3

USA 66.1 63.8 76.7 59.7

FRA 66.0 80.9 71.5 47.7

SPA 60.4 87.5 45.0 50.6

CHL 60.0 83.7 53.2 44.9

FIN 58.9 77.4 51.9 49.3

BRA 58.1 83.5 49.5 43.0

CAN 57.5 75.9 53.5 44.7

AUS 57.3 85.0 41.4 47.3

UK 57.0 91.2 30.6 50.9

THA 56.9 69.4 50.8 52.1

BEL 56.6 83.2 40.2 48.1

SAR 54.4 53.1 55.1 56.5

IND 53.6 (Rank #18) (#17) 78.4 36.5 (#17) 47.5 (#16)

GER 53.6 86.2 26.9 49.2

CZE 53.0 80.1 33.6 47.0

IRE 52.5 87.9 29.0 42.3

JAP 51.3 62.0 41.6 52.0

RUS 50.9 89.9 14.1 50.1

ITA 50.7 82.0 24.2 47.5

COL 46.4 70.3 23.5 46.7

MEX 45.5 82.0 15.2 40.7

TUR 44.0 74.0 16.1 43.3

INS 40.5 77.4 5.9 39.4

SAF 39.5 54.9 17.5 47.4

EGY 36.3 68.7 11.7 29.6

ARE 28.4 19.9 17.9 48.3

NIG 18.5 46.7 0.00 9.4

Source: ICRIER-Prosus Centre (IPCIDE)

32
 03. Connect: Another Big Push

3.2. Affordability remains a challenge in the developing world

In the group of 32 countries (G32), out of the total developing countries than developed countries
population of roughly5.3 billion (2023), about 1.4 compared to a factor of three times for data prices.
billion don’t use the internet, of which 1.2 billion (or (see Figure 3.2). 15 out of 17 developed countries
86 percent) are from developing countries.21 The in our sample have achieved more than 80%
corresponding numbers for smartphones are 1.7 smartphone ownership and 90% internet access
billion non-users and 1.6 billion from developing (left panel). In contrast, only three of 15 developing
countries (94 percent). While for most countries countries have reached the same level of adoption.23
in our sample (Argentina being an exception), the Despite extremely low prices, they comprise a
price of mobile data is below 2 percent of GNI, the significant percent of the per capita income in
threshold defined by the Broadband Commission developing countries, making connectivity out of
for affordability, this may still be unaffordable for reach for millions of people. Unless a concerted
the lowest income percentile.22 However, much of effort is made by the governments, private sector
the affordability challenge comes from the price of and multilaterals to pursue universal access at
smartphones. The price of the cheapest smartphone affordable prices and decent quality, the world risks
as a share of GNI, on average, is 10 times higher in leaving millions behind in digital darkness.

Fig. 3.2 Affordability a persistent challenge among developing countries

Smartphone – price and use

100
SAR
US
Trend line
90 (developed)

ARG
% of population using smartphones

TUR
80 THA
CHL
CHN
RUS
Trend line
70
(developing)
COL
BRA
MEX
INS EGY
60
SAF

50
IND

NIG
40
0 10 20 30 40 50
Price of cheapest smartphone (% of average monthly income)

Developed Countries Developing Countries

Source: ICRIER-Prosus Centre (IPCIDE)

21
International Monetary Fund. (2023, April). Country Composition of WEO Groups. World Economic Outlook Database: Groups and Aggregates
Information.
22
Broadband Commission for Sustainable Development. 2025 Broadband Advocacy Target 2: Make Broadband Affordable.
23
Despite official classification of Saudi Arabia as a developing country, it is de facto a high-income country.

33
 03. Connect: Another Big Push

Fig. 3.2 (Contd.) Affordability a persistent challenge among developing countries

Internet – price and use

100 SAR

US

90 RUS Trend line

CHL THA (developed)
ARG
% of population using the internet

BRA
80 TUR

CHN MEX
70 Trend line
(developing)
EGY SAF
COL
INS
60

50 IND
NIG

40
0 0.5 1.0 1.5 2.0 2.5
Price of mobile data & voice basket (% of average monthly income)
Developed Countries Developing Countries
Source: ICRIER - Prosus Centre (IPCIDE)

3.3. Quality of broadband has uniformly increased among G20

countries

The quality of broadband has been steadily the existing quality, which despite the decline is
improving. Both the median and maximum higher than the average (see Figure 3.2). With the
download speeds for fixed line and mobile addition of countries like Singapore and Denmark
broadband have improved in the last twelve in our set of comparator nations, the median speed
months (see Figure 3.3). The median speed among for fixed broadband goes up to 120 Mbps. These
G20 countries improved from 47.4 Mbps for improvements can be explained by widespread
mobile to 57.5 Mbps between 2023 and 2024. The adoption of advanced fibre-optic technologies
corresponding estimates for fixed-line broadband like 5G. In the future, accelerated improvements in
are 80.5 Mbps and 92.3 Mbps respectively. The quality of broadband may not be possible, as service
average download speed has increased for every providers globally face challenges in monetising 5G
country, except China. This could be on account and realising return on investments (see Box 3.1).
of a rationalisation of infrastructure upgrade and

34
 03. Connect: Another Big Push

Fig. 3.3 Quality of mobile broadband has increased dramatically in India, but not for fixed broadband

Median Mobile Download Speeds (Mbps) Median Fixed Broadband Download Speed (Mbps)

160 300

140
250

120
CHN
200 CHN
100

80 150

60
100

40

50
20

0 0
2023 2024 2023 2024

Source: ICRIER-Prosus Centre (IPCIDE)

Box 3.1: The Challenge of Monetising Investments in 5G

According to the latest data available over 100 countries have already rolled out 5G services. Over
261 service providers globally have invested billions of dollars in setting up 5G networks. However,
the lack of use cases and the customer indifference between 4G and 5G network quality has led to
very poor monetisation. New opportunities in enterprise connectivity and private 5G have scaled,
but not at the expected rate. Besides capital costs, regulatory hurdles also hinder the adoption
of enterprise 5G. The two-pronged policy response for 5G in India has been to lower the cost of
5G infrastructure including through availability of new spectrum and to build use cases through
government set up 5G test-beds. However, India is still to unlock the true potential of 5G.

Sources: GSMA24 and Tata Elxsi25

24
Suardi, S., & Castells, P. (2022, February). The Socio-Economic Benefits of Mid-Band 5G Services. GSMA.
25
Economic Times. (2024, August 27). In-depth: 5G Monetisation in India Remains Elusive with Jio, Airtel Eyeing FWA as Potential Silver Lining. Tata
Elxsi.

35
 03. Connect: Another Big Push

3.4. India’s dependence on mobile networks: A blessing or a curse?

Empirical evidence finds that developing countries however, the fixed broadband tariffs are much higher
in general rely on mobile based internet networks than the median. This disproportionate imbalance
as compared to the predominance of fixed line in also exists in broadband speeds – mobile speed is
developed countries. This in part is the leapfrogging much higher than the median, and fixed line speed
by developing nations to help overcome the cost is lower than the median. With lower costs and
and technological complexities of building and better quality, a significantly higher proportion of
maintaining fixed line broadband. However, in internet traffic flows through the mobile network.
case of India, the imbalance between mobile and In fact, India is the only country, other than Nigeria
broadband networks seems unusually high (see (in our sample) where the traffic flow on mobile
Figure 3.4). India’s mobile tariff are at the median; networks is higher than the fixed network.

Fig. 3.4 India’s disproportionate focus on mobile-based connectivity

Download Speed (Mbps)

350

SNG

300
CHL

US
250 FRA
THA
DEN
SAP
Fixed Broadband

200 CAN
CHN NET
JAP
BRA
SKO
COL
150
IRE
FIN
UK SAR
RUS BEL
100
ARG GER
EGY
MEX CZE AUS
EGY SAF IND
50
INS TUR
NIG
0
0 20 40 60 80 100 120 140 160

Mobile Broadband

Source: ICRIER-Prosus Centre (IPCIDE)

36
 03. Connect: Another Big Push

Fig. 3.4 (Contd.) India’s disproportionate focus on mobile-based connectivity

Traffic (GB)
600

SAR
500 FIN

400
Mobile Broadband

MEX
300 THA
CHL
DEN
IND RUS AUS
ITA
200
TUR SKO
CHN
SPA
INS GER
100 JAP UK
COL CZE
BRA CAN
IRE BEL
ITA
SAR
0 NIG
0 500 1000 1500 2000 2500 3000 3500

Fixed Broadband
Source: ICRIER - Prosus Centre (IPCIDE)

While a mobile-first network has helped accelerate schools and primary health centres in rural India.26
adoption of internet in India (blessing), the lack of Other policy changes, including the alignment of
a complementary fibre backbone risks resiliency Right of Way (RoW) Rules across states in India, is
and can adversely affect the country’s digital also directed toward enabling the private sector
ambition (curse). In response to this challenge, the to lay more fibre.27 With some of these efforts, the
Union Budget 2025-26 has significantly increased balance of India’s communications network is likely
the budget for India’s rural broadband program, to rebalance in favour of fixed line infrastructure.
Bharat Net, proposing to connect all government

3.5. Gender divide is declining, but remains high in many countries

A comparison of gender divides between the countries (see figure 3.5) The median values in
last two years, shows a nominal decline for most the G20 group hovers around 1 percent, as most

26
Press Information Bureau. (2025, February 1). Union education minister lauds historic budget 2025-26. Ministry of Education.
27
Rathee, K. (2024, November 21). Telecom Right of Way rules must for states from January 1. Economic Times.

37
03. Connect: Another Big Push

countries have reached high levels of penetration. not be misinterpreted as a time to abandon policies
In countries like Brazil and United States, the gender that focus on internet use among women since the
divide is negative, indicating higher number of gender divide is still high; and persists in countries
female users, as against male users. This trend must like Indonesia, Japan, Turkey and India.

Fig. 3.5 Digital gender divide is generally declining in G20 countries, especially in Latin America

12%

10%

8%
Gender gap in internet penetration (%)

6%

4%

2%

0%

-2%

-4%

-6%
2024 2025

Source: ICRIER-Prosus Centre (IPCIDE)

Note: The gender gap is calculated as the percentage point difference in internet penetration divided by the percentage point population
penetration. Countries which for which we could not find updated values (Australia, China and South Africa) are not shown in this graph. In
the 2025 index, the same values used in the 2024 index have been used.

In India the narrowing of gender divide has between male and female users has increased (see
plateaued. This comes at the back of a rapid Figure 3.6). For smart phones, the gender divides are
improvement reported in the previous iteration of higher, but usage among rural women is growing.
the SIDE report (2024) as rural women had begun Policy efforts have to be kept alive to address the
to use the internet through shared devices. While gender divides which arise due to a variety of socio-
the percentage point difference between urban economic factors including levels of literacy and
male and female internet users has remained the social agency among women.
same, for rural users, percentage point difference

38
 03. Connect: Another Big Push

Fig. 3.6 Gender divide persists in urban areas and worsens in rural areas

Internet Use

Urban

77

73 69 73

56

61 44

Ru
ral
rall

39
Ove

2 2024
49 2 02 54
2
24
02
20

54
2 02 4
2022

47

Male Female

Smartphone Use

Urban
71

65 59 62

54 41 40
Ru
ral
rall
Ove

24

2 2024
2 02 45
36 2
24
02
20

49 30
2 02 4
2022

Male Female

Source: ICRIER-Prosus Centre (IPCIDE)

39
04. Harness: A New Story Emerging from the Global South

04

Harness

40
 04. Harness: A New Story Emerging from the Global South

Harness: A New Story Emerging from the

Global South
4.1. India’s success in digitalisation is largely one of better harness
The world is moving beyond the goal of universal Despite its delayed adoption of digital technology
connectivity to widespread harnessing of digital (compared to the US), China today, has the largest
technologies. With 68 percent of global population internet user base.30 It tops the Harness Pillar with a
online, the growth of the digital economy is beginning score of 68, and also ranks number one in three of
to be driven by the level and quality of technology the four sub-pillars (apps & platform economy, data
use.28 In the CHIPS framework, the variation in digital intensity and fintech). China has become the “app
activity is likely to be much more in Harness, than the capital” of the world with one out of every two app
Connect pillar. This by no means deflects from the downloads within G32 taking place in China. It also
challenge of persistent disparities in connectivity, accounts for 42 percent of all e-commerce users, 40
but to recentre the focus from only bridging access percent of all food delivery platform users, 30 percent
divides to greater leveraging of the platform and app of digital health application users, and 29 percent
economy, digital disruption of traditional industries of video-on-demand users within G32. High quality
(e.g., fintech), and building the value generating end internet infrastructure, affordable prices, dynamic
of the digital ecosystem. home-grown internet companies and high digital
literacy explain China’s ability to leverage and scale-
Harness is India’s strongest pillar. India’s eighth rank up technologies for everyday use. While China’s
among G32 countries (as reported in Chapter 2) is proclivity to control the internet through firewalls,
largely driven by its outperformance in the Harness extensive censorship and social credit scores have
Pillar. India is placed third in harnessing digital not impaired the spread of the internet as its critics
technologies, after China and the US (see Figure feared, its inability to export the Chinese model to
4.1). Within the Harness Pillar, India’s highest score the rest of the world has taken some shine off its
comes from the Real Economy sub-pillar, in which status as the most successful harnesser of digital
it ranks third in the world (detailed discussed in the technologies.
following sub-sections). This is on account of the
fact that India is the second-highest exporter of ICT The successful harnessing of digital technologies by
services (19 percent of G32 share) after Ireland (27 developing countries goes beyond China and India.
percent), and the market capitalisation of its IT sector As shown in Figure 4.1, Brazil is ranked fourth in the
is also the third highest, following US and China. A apps and platform sub-pillar, Saudi Arabia is placed
recent study prepared by ICRIER for the Ministry of second in data intensity, Nigeria ranks third in fintech
Electronics and Information Technology (MeitY), and Chile is among the top ten countries both for
finds that India’s digital economy accounted for apps and platform as well as data intensity. The large
nearly 12 percent of its GDP in 2023, and is expected share of digital natives, absence of legacy systems
to grow to become nearly USD one trillion by 2029.29 that resist adoption of newer technologies, and
India’s strong performance is explained by its large spread of remote work and influencers, especially
and young population, that is eager to adopt new after the Covid-19 pandemic, are some of the factors
technologies; a globally-competitive ICT export that have helped developing countries leap frog and
sector, increasing penetration of mobile internet, emerge as strong harnessers of digital technologies,
and successful rollout of digital public infrastructures especially for the app economy.31
(DPIs) such as Aadhaar, Unified Payment Interface
(UPI) and Digilocker.

28
Pham, M. (2024, November 27). ITU: Global Internet users hit 5.5 billion, digital divide persists. Developing Telecoms.
29
ICRIER. (2025, January). Estimation and Measurement of India’s Digital Economy. Ministry of Electronics and Information Technology.
30
China has been on the Internet intermittently since May 1989 and on a permanent basis since 20 April 1994, although with heavily censored
access. Source: China Internet Museum. (n.d.)
31
We use the IMF’s World Economic Outlook for classification of developing (including emerging) and developed countries. Source: International
Monetary Fund. (2023, April). Country Composition of WEO Groups. World Economic Outlook Database: Groups and Aggregates Information.
04. Harness: A New Story Emerging from the Global South

Fig. 4.1 China, India and several developing countries have successfully leveraged digital technologies
Pillar Sub-Pillar

Country Harness Apps and Data Intensity Fintech Real Economy

platforms

CHN 62.9 89.9 72.7 57.0 32.0

USA 50.7 50.7 NA 46.0 57.0

IND 36.6 (Rank #3) 41.5 (#3) 29.4 (#7) 27.1 (#10) (#3) 47.0
SKO 28.8 24.1 31.2 28.3 32.0

NET 27.7 26.2 NA 25.7 32.0

IRE 27.6 28.6 6.0 25.5 50.0

SAR 26.6 23.0 54.1 21.1 8.0

UK 26.5 33.1 31.5 30.7 11.0

SNG 26.0 29.9 NA 32.3 17.0

FIN 26.0 23.0 33.4 23.1 25.0

CAN 24.3 32.2 23.0 28.0 14.0

GER 23.6 23.9 21.8 23.6 25.0

DEN 22.8 29.7 29.8 27.8 4.0

JAP 22.5 19.1 19.7 35.5 16.0

AUS 21.6 29.0 26.2 26.8 4.0

CHL 20.4 30.3 28.3 20.5 2.0

SPA 19.7 25.9 21.6 20.7 11.0

THA 19.3 15.0 21.0 26.7 14.0

MEX 19.3 32.6 23.2 15.1 7.0

ITA 19.3 24.3 21.9 26.5 4.0

BRA 19.2 37.8 7.9 24.0 7.0

BEL 19.1 28.8 16.3 23.4 8.0

RUS 18.9 21.4 20.4 25.6 8.0

CZE 18.0 20.8 19.0 24.0 8.0

FRA 17.7 20.8 NA 23.7 9.0

ARE 16.5 26.4 NA 15.8 8.0

TUR 15.5 23.3 16.6 17.5 5.0

INS 13.7 25.9 12.5 9.2 7.0

NIG 12.7 10.0 NA 36.6 4.0

SAF 12.3 18.4 3.3 19.7 7.0

COL 11.5 26.4 5.5 9.9 4.0

EGY 7.9 16.3 4.8 9.0 2.0

Source: ICRIER-Prosus Centre (IPCIDE)

42
 04. Harness: A New Story Emerging from the Global South

4.2. Developing countries dominate as consumers and developed

countries as suppliers of digital services

Users of digital technologies in developing when measured in relative terms, 41 percent of

countries far outnumber those in advanced internet users in developing countries use social
economies. In our sample of 32 countries (G32), media for work related activities compared to
there are 17 developed or advanced countries 26 percent in developed countries. This is also
and 15 from the group of emerging or developing true for number of app downloads per user – the
countries, as per World Economic Outlook’s latest average for a developing country user is 61 apps,
information on country groups and aggregates. while that for advanced countries is 39 apps.
Even within this sample, users across developing The share of developing country users for food
countries form the majority in 14 out of 16 indicators delivery platforms, e-commerce, video-on-demand,
under the Harness pillar (see Figure 4.2). In fact, digital payments, digital health applications are 77
for use social media for work-related activities, percent, 73 percent, 74 percent, 72 percent and 62
the share between developing and developed percent, respectively.
are 85 percent and 15 percent respectively. Even

Fig. 4.2 Developing countries dominate as consumers and developed countries as suppliers in the digital
economy

86% 14%
Mobile app downloads
85% 15%
Users of social media for work
77% 23%
Digital food delivery users
75% 25%
Mobile broadband internet traffic
74% 26%
Fixed broadband internet traffic
74% 26%
Video-on-demand users
73% 27%
E-commerce users
72% 28%
Digtal payment users
Value of digital payment 70% 30%
transactions
Receivers of digital private 69% 31%
sector wages
Value of neo banking 62% 38%
transactions
62% 38%
Digital health users
Receivers of digital 61% 39%
government pension
Receivers of digital public 43% 57%
sector wages
29% 71%
ICT Services Export
16% 84%
IT market Capitalisation

Developing (15 countries) Developed (17 countries)

Source: ICRIER-Prosus Centre (IPCIDE)

43
04. Harness: A New Story Emerging from the Global South

The gap between the number of users in distribution of gains from the digital economy.
developing and developed countries is likely to Global dialogue on taxation and governance of
expand over time. In the last twelve months, for G20 cross border data flows, has therefore taken centre
countries, the number of users for e-commerce, stage.32,33 As protectionist tendencies grow in the
video-on-demand, food delivery and digital health Global North, especially in the US, against imports
in developing countries grew by 10.7 percent and investments in goods from the rest of the world,
compared to 7.1 percent in developed countries. they remain vulnerable to quid-pro-quo retaliation
However, for real economy indicators like ICT from developing countries on digital services. There
services export and IT market capitalisation, the is already evidence of increasing number of anti-
developed countries have a significantly higher competitive cases in developing countries against
market share, indicating their continued dominance the big tech companies, including against large
in supply of digital technologies and services. Such app stores.34 With Global South users dominating
concentration of digital consumers in developing the market and stepping up their participation in
countries and those of digital service providers governance of global digital systems as well as
in developed countries will have far reaching standard setting practices, we are likely to see a new
consequences for global trade, investment and equilibrium evolve.

4.3. India’s sweet spot as a large consumer and producer of

digital services

India, however, has bucked the trend by emerging broadband traffic is 22 percent of the total for G32
as an important consumer and producer of digital countries, while that for all of developed countries
services. In 13 of the 16 harness indicators, India in our samples is 25 percent (see Figure 4.3). It
performs above average for our grouping of G32 is also the largest exporter of IT services among
countries, its share is as high or greater than that developing countries, accounting for 65 percent
for all developed countries in indicators like social share of all developing countries.
media use and app downloads. Also, India’s mobile

32
OECD. (2021). Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two): Inclusive
Framework on BEPS. OECD Publishing.
33
OECD. (n.d.). Cross-border data flows.
34
APEC Competition Policy and Law Group. (2022, March). Competition Law and Regulation in Digital Markets. APEC.

44
 04. Harness: A New Story Emerging from the Global South

Fig. 4.3 India’s sweet spot as a large consumer and producer of digital services

The Global Frontier: Highest Score by

India
score
Indicator (normalised to 100)
Digital Government Pension 82
Social media usage for work 80 3.2
ICT Services Export 69 4 9.3
Mobile broadband internet traffic 68 2.8
Video On Demand Users 64 3.7
Digital public sector wages 52
Digital health users 40 4.3
7.3
Digital food delivery users 39 2.5
Digital payment users 37 3.7
Mobile app downloads 29 1.8
E-commerce users 25 1.9
Digital payments value 19 0.9
Digital private sector wages 15 2.4
Fixed broadband internet traffic 5 3.3
IT market capitalisation (USD) 4 0.3
Neobanking transactions 2 1

Social media usage for work 14% 71% 14%

Digital food delivery users 24% 61% 15%

Digital health users 16% 61% 23%

E-commerce users 22% 53% 25%

Mobile app downloads 3% 71% 26%

Video On Demand Users 19% 56% 26%

Fixed broadband internet traffic 10% 63% 27%

Mobile broadband internet traffic 13% 59% 28%

Digital payments value 10% 60% 30%

Digital payment users 7% 62% 31%

Digital private sector wages 1% 62% 38%

Value of neo banking transactions 12% 50% 38%

Digital public sector wages 14% 47% 39%

Digital govt pension 13% 30% 57%

ICT service exports 19% 10% 71%

IT market Capitalisation in USD 3% 13% 84%

Share of India Share of other developing countries Share of developed countries

Source: ICRIER-Prosus Centre (IPCIDE)

45
04. Harness: A New Story Emerging from the Global South

4.4. India gains spotlight in the fintech ecosystem

The success of India’s Unified Payments Interface payment platforms.36 Among our sample of G32
(UPI) in scaling digital payments and driving countries, India reports the third highest value in
financial inclusion is now well-documented. digital payments, following China and US (see
Over the last five years the volume and value of Figure 4.4). A recent paper by the ICRIER-Prosus
digital payments have increased at a staggering Centre on diffusion of digital payments suggests
compound annual growth rate (CAGR) of 89.3 that improvements in socio-economic factors such
percent and 86.5 percent, respectively.35 While as income, poverty, education, digital literacy, and
no universally accepted estimate on the number financial access are necessary, but not sufficient
of digital payment users is available, the latest for widespread adoption. A deeper assessment of
media reports peg it at 424 million. This is lower costs and benefits of digital payments for different
than the 550 million registered users as of Q2 user categories, and a multi-pronged approach will
2024, reported by Phone Pe, India’s largest digital be necessary.37

Fig. 4.4 India’s emerging fintech landscape

Value of digital payments (USD billion) Value of neo banking transactions (USD billion)

10000 10000
CHN

USA
IND
1000 1000

JAP
IDN UK
GER BRA
CAN RUS
FRA ITA
SKO
100 AUS MEX 100
SAR
ARG
TUR
CHN
SAF
10 10

1 1
2023 2024 2023 2024

Source: ICRIER-Prosus Centre (IPCIDE)

Note: Y Axis in log scale

35
India Brand Equity Foundation. (2025, January 28). United Payments Interface (UPI) dominates digital payments, sees explosive growth over five
years.
36
PhonePe Pulse. (2025). Transactions.
37
Kedia, M., Reddy, A., & Shukla, S. (2024, March). Diffusion of Digital Payments in India - Insights Based on Data from Phonepe Pulse. ICRIER.

46
 04. Harness: A New Story Emerging from the Global South

The UPI network has also spurred innovation in the (see Figure 4.1). Legacy systems, high levels of credit
wider ecosystem, enabling firms to provide a range card penetration and digital banking are driving the
of financial services including lending and wealth growth of fintech in the US. China benefits from an
management. India is home to the fourth largest extensive app-based payments system as well as
number of fintech unicorns (26) with a combined digitally transformed commercial banks. Nigeria
market value of USD 90 billion, next to US, China on the opposite end of the developed country
and UK with 170, 38 and 37 unicorns, respectively.38 spectrum, like several other African countries
The development of the fintech ecosystem has also (Kenya, South Africa), is riding the start-up wave,
supported the growth of neobanks in India (value with mobile-based, digital light platforms that were
of transactions doubled within 12 months), though launched at least a decade before DPI-led systems
the industry lags behind several developed and of UPI and Pix were launched in India and Brazil,
developing countries in its overall size (see Figure respectively.
4.4). Nigeria stands out as leader in neobanking,
topping the continent in early-stage fintech In India, UPI helped accelerate financial inclusion
investment in 2023. Nigeria also accounted for as legacy systems were slow to transform. India can
42 percent of fintech deals, 32 percent of fintech leverage the explosive growth in digital payments
startups and 49 percent of total fintech funding to strengthen its fintech ecosystem by encouraging
within Africa.39 a stream of new digital services – digital lending,
wealthtech, insurtech, etc., but at the same time
The fintech sub-pillar is led by US, China and Nigeria ensuring suitable guardrails to protect consumers.
that are playing to different strengths

4.5. India’s full market potential is still to be harnessed

Given India’s large population, even a small share areas, especially for OTT video, digital payments
of users implies a very large base. In 2024, only 48 and search. The gender gaps are relatively lower for
percent of internet users watched video online, 43 digital activities, ranging between 4 to 5 percentage
percent accessed social media, 40 percent used points, but for email use it is wider at 8 percentage
email and listened to online music, 26 percent points. The gender divides in digital activities are
made any digital payments, and only 25 percent smaller than that for smartphones access under the
searched online (see figure 4.5). In absolute terms, Connect pillar but converging at similar rates. Data
these shares translate into roughly 400 million suggests that on average geographical divides are
users for OTT video and food delivery and almost higher than gender divides for adoption of digital
350 million for social media. These numbers also activities, but are also narrowing faster. The only
imply that India will remain a massive business exceptions are OTT videos where gender gaps are
opportunity for tech companies for years to come. narrowing faster and email use, where gender gaps
Use of digital activities is rapidly catching up in rural are widening (see Figure 4.5 and 4.6)

38
Chadha, S. (2024, September 03). India home to 26 fintech unicorns with a combined market value of $90 bn. Business Standard.
39
Oriarewo, E J. (2024, August 30). Why The Nigerian Tech Industry is FinTech-Driven. Veriv Africa.

47
04. Harness: A New Story Emerging from the Global South

Fig. 4.5 Geographical divides are higher than gender divides for digital activities

Percent of population engaged in digital activities (2024)

Email O nl i n
eM
usic

56%
i a Di
ed 51% gi
l M ta
ia 40% 40% l
c

34%

Pa
59%
So

ym
32%

en
t
43%
46%
16% 26%
35%
64%

Onlin
ideo
OTT V

e Se a
21%
48%
25%

rch
40% 32%

Rural Indian Average Urban

Percent of population engaged in digital activities (2024)

Email Onlin
eM
usic

ia Di
ed g
lM ita
ia 42% l
44% 40% 36% 40%
c

Pa
So

ym

38%
en
t

41%
43% 29%
46% 27%
24%
Onlin
ideo

46%
OTT V

e Se a

27%
48%
rch

25%
51% 22%

Male Indian Average Female

Source: ICRIER-Prosus Centre (IPCIDE), ICUBE 2024

48
 04. Harness: A New Story Emerging from the Global South

Fig. 4.6 Geographical divides are closing faster than gender divides

Growth rate for users (2022- 2024)

e Search Socia
Onlin l Me
di a

o 14.1%
de On
Vi 8.9% li
T
8.2%

ne
OT

7.2%

M
us
ic
5.4% 9.7%
2.1%
14.6% 9.0%
3.6%
7.0%
ent

4.1%
aym

Email
Digital P

6.6% 5.5%
9.2% 4.8%
13.8% 3.9%

Rural Indian Average Urban

Growth rate for users (2022- 2024)

e Search Onlin
Onlin e Mu
sic

o
de So
Vi 7.6% ci
T 6.6%
al
OT

5.1% 5.4%
M

10% 6.1% 5.7%

ed
ia

5.9%
6.9%
5.0%
6.7%
5.3%
ent
aym

Email

9.5%
Digital P

4.9%
8.9%
2.6%
7.7% 1.4%

Male Indian Average Female

Source: ICRIER-Prosus Centre (IPCIDE), ICUBE 2022 and 2024

49
04. Harness: A New Story Emerging from the Global South

The case of digital payments is particularly women towards adoption of UPI. Empirical analysis
interesting where government with the help of local using state-level data finds that the likelihood of a
communities– self-help groups (SHGs), banking male internet user to also use digital payments is
correspondents, village common service centres higher than that for a female internet user, but the
and local administration or gram panchayats difference is surprisingly not very significant. The
has made massive inroads into adoption of UPI differences between rural and urban areas is far
in rural areas. SHGs particularly, have nudged more significant (see Box 4.1 for more details).

Box 4.1: Geographical divides exist for digital payments but

are not significant for gender
The correlation between percent of population using the internet and percent of population
using digital payments is steeper in urban areas than rural areas (i.e., for every additional
individual using the internet, there is a greater likelihood of using digital payments in urban areas.
The result is intuitive not only due to higher network effects in urban areas but also because of
factors such as greater network reliability, greater digital literacy, etc. The graphs shows that there
is greater variation between states in adoption of digital payments as rural areas gain higher levels
of internet penetration, suggesting the importance of a critical user base. Some such states are
Mizoram, Karnataka, Jammu & Kashmir which have particularly high adoption of digital payments
in rural areas. On the flip side, Arunachal Pradesh has seen particularly low adoption of digital
payments even in urban areas, due to relatively lower internet penetration.

The graph on male -female use of internet and digital payment shows that the slope is slightly
higher for males than females, but the difference is not as significant. However, the correlation is
stronger and has a greater slope for males compared to females in urban areas (a male internet
user in urban areas is significantly more likely to also adopt digital payments than a female user
in urban areas) - whereas in rural areas, the correlation is slighter stronger and steeper for females
than males, but not too different. This may be because in rural areas, access to the internet is still
a significant barrier for women to access digital payments - and a greater proportion who are
gaining access to the internet are individuals like the youth who are likely to make more diverse
and bolder use of the internet.

50
 04. Harness: A New Story Emerging from the Global South

Rural vs. Urban

70%
Telangana

60% NCT of Delhi

Maharashtra

Karnataka
y = 1.74x - 0.88 Mizoram
50% R2= 0.53
Mizoram Chandigarh
Percent using digital payments

DD
Karnataka
40% J&K D&NH
Sikkim
Meghalaya

30% Telengana

Arunachal Pradesh
20% Goa
Arunanchal Pradesh Sikkim
Maharashtra

10% y = 1.18x - 0.42

WB R2= 0.60

0%
0 10% 20% 30% 40% 50% 60% 70% 80% 90%

Percent using internet

Rural Urban

Female vs. Male

70%
NCT of Delhi

60%
J&K NCT of Delhi
Kerala
50% Mizoram
Percent using digital payments

Chandigarh
Mizoram
Kerala
Chandigarh
40%
y = 1.20x - 0.44
R2 = 0.72 J&K
Goa
30% Punjab
Goa
Sikkim
Sikkim
20%
Uttar Pradesh
Bihar
y = 1.15x - 0.41
10% Uttar Pradesh
Bihar R2 = 0.75

0
0 10% 20% 30% 40% 50% 60% 70% 80% 90%

Percent using internet

Female Male

Source: ICRIER-Prosus Centre (IPCIDE), ICUBE 2022 and 2024

51
05. Innovate: Towards a Global Duopoly?

05

Innovate

52
 05. Innovate: Towards a Global Duopoly?

Innovate: Towards a Global Duopoly?

5.1. US, undisputed leader in digital innovation, is waking up to China’s

rise as a lead innovator

Home to the world’s tech giants, US remains the 64 technologies in 2019–2023.41 These include
undisputed leader in digital innovation with a score radio-frequency communications, nanoscale
of 81 that is twice as high as the next in line, China. materials and manufacturing, synthetic biology and
It ranks first across all three sub-pillars – (i) artificial supercapacitors. The announcement of Deepseek
intelligence, (ii) investment and startups as well as in early 2025, is yet another testament to the
(iii) adoption of emerging technologies (see Figure country’s growing technical prowess. In contrast
5.1). The outcomes reflect the longstanding culture to the American model of tech leadership, China’s
of entrepreneurship, a large tech talent pool, robust centralised approach and state-led support for
funding and enabling government policies. Eight industries of national interest, has led to this sharp
out of the top ten AI models ranked in Forrester’s “AI rise.
Foundation Models for Language” report, belong
to American companies, including major players India’s innovation capabilities are greater than its
like Amazon, Google, IBM, and Microsoft. The level of development, but nowhere near that of a
remaining two – Cohere, a Canadian AI company leading nation. Overall, India ranks 9th among the
operates with co-headquarters in both Toronto 32 countries, which is impressive given that it has
and San Francisco, and Mistral AI is based out of the lowest per capita income in the group. India
France.40 performs particularly well (rank 4) on investments
and startups, reflecting its status as home to the
Not yet taking over the US, but China is rapidly third largest number of unicorns in the world, and
evolving from being an imitator to becoming a lead continues to receive fairly large sums of venture
innovator for frontier technologies (rank 2). While capital funds.42 It however lags in the AI sub-
known for years to be the world’s manufacturing pillar (rank 13) resulting from low infrastructure
workshop, China has now gained significant global availability and lack of cutting-edge deep tech
share in emerging industries such as robotics, AI, research. This situation could significantly change
quantum computing and biotech. According to if the announced investments and policies in
the Critical Technology Tracker published by the the Union Budget in 2024-25 and 2025-26 are
Australian Strategic Policy Institute, while China effectively implemented (also see the last section of
led in just three of 64 technologies in 2003–2007, this chapter).
it is now the lead country in as many as 57 of

40
Haranas, M. (2024, June 12). Top 10 AI Foundation Models Ranked: Google, Nvidia, OpenAI Lead Forrester Report. CRN.
41
Leung, J W., Robin, S., Cave, D. (2024, August). ASPI’s two-decade Critical Technology Tracker: The rewards of long-term research investment.
Australian Strategic Policy Institute.
42
Das, B. (2024, April 09). Unicorns worldwide: India ranks third with 67 unicorns, US has 703, China has 340. Business Today.

53
05. Innovate: Towards a Global Duopoly?

Fig. 5.1 US is the top nation on digital innovation and China is catching-up, while India ranks high on
startups and lags behind on AI
Pillar Sub-Pillar

Country Innovate Artificial Intelligence Investments & Startups Emerging Technologies

USA 81.0 86.8 81.0 77.7

CHN 39.7 57.3 16.7 46.3

SNG 29.1 28.1 30.6 29.5

SKO 21.7 33.0 3.6 29.4

UK 19.7 16.2 21.0 22.5

GER 18.9 13.2 15.8 28.3

IRE 17.4 5.0 15.1 32.6

NET 17.3 17.3 14.1 21.0

IND 15.3 (Rank #9) 6.2 (#13) 24.4 (#4) 15.7 (#18)

FRA 13.1 11.1 6.8 21.7

COL 12.9 0.5 29.8 8.8

JAP 12.1 15.4 0.4 20.8

FIN 11.9 7.8 7.7 20.5

AUS 11.3 7.9 7.1 19.3

CAN 11.0 10.2 5.6 17.5

CZE 10.9 3.7 16.0 13.3

TUR 10.4 1.5 7.5 22.5

ITA 10.4 5.1 3.1 23.3

DEN 9.7 4.4 6.2 18.8

ARE 8.9 0.5 15.0 11.4

RUS 8.3 1.7 NA 15.0

SPA 8.0 4.2 2.5 17.6

BRA 8.0 2.3 12.4 9.4

INS 7.7 3.0 11.8 8.6

MEX 7.4 2.1 12.8 7.6

BEL 7.4 3.2 9.2 10.1

EGY 7.2 0.8 7.6 13.5

NIG 5.8 0.3 10.1 7.2

SAR 4.9 2.2 NA 7.5

CHL 3.5 0.5 2.6 7.5

SAF 3.2 0.9 3.2 5.6

THA 2.6 1.3 1.0 5.5

Source: ICRIER - Prosus Centre (IPCIDE)

54
 05. Innovate: Towards a Global Duopoly?

5.2. Is the AI world at risk of being dominated by two countries?

US and China have gained decisive lead over the which reinforces outcomes for other pillars. Asian
rest of the world in AI (see figure 2). As reported economies like Singapore, South Korea and Japan
in SIDE 2024 and the Global AI Index 2024, US with high levels of government tech maturity are at
and China are ranked as first and second place. the intermediate stage of AI development. They are
In the latter report, the dominance of US and investing in AI infrastructure, talent and research; as
China follows through for each of its three pillars – well as coordinating global cooperation on AI safety
implementation, innovation and investment.43 Here and security.45 The AI ecosystem is also expanding
we look at infrastructure availability and research in UK and France, though infrastructure availability
outcomes for our set of 32 countries, where both US has not expanded proportionately. India ranks 11th
and China dominate (see figure 5.2). Infrastructure on AI research and 16th on AI infrastructure, which is
and research outcomes in AI are also strongly significant, but not enough to make it an important
correlated – a 1% improvement in the infrastructure player in the production of AI. With the world’s
score (indexed from 0-100) is associated with largest AI-skilled workforce and the government’s
0.76% improvement in AI research outcomes (also recent efforts, India has the potential to make rapid
indexed from 0 -100).44 The high association is progress in the coming years.46
reflective of overall AI capacity and the ecosystem

Fig. 5.2 US and China: Hegemons in AI

100 USA

80

line
Reserach in AI (US value indexed to 100)

nd
Tre
60
CHN

30
Advanced

SNG
UK
20
FRA
Intermediate

IND CAN GER

DEN AUS SKO
FIN JAP
ITA NET
BRA
IRE
0
0 10 20 30 4 50 60 70 80 90 100
Infrastructure for AI (US value indexed to 100)

Source: ICRIER - Prosus Centre (IPCIDE)

43
White, J., & Cesario, S. (2024, September 19). The Global Artificial Intelligence Index 2024. Tortoise Media.
44
By including infrastructure in AI as well as research in AI as two independent indicators, we could be charged with mixing inputs and outputs
as most other indices do. But given that AI is still in its infancy, there are few credible output indicators. We hope to replace infrastructure in AI
with better outcome indicators in the future editions of SIDE.
45
Mohanty, A., & Bharadwaj, T. (2024, June 28). The Importance of AI Safety Institutes. Carnegie India.
46
Jeevanandam, N. (2024, April 16). India tops global AI skill penetration and talent concentration rates. INDIAai.

55
05. Innovate: Towards a Global Duopoly?

India remains a large consumer of emerging expected to reach USD 6.4 billion with over 100
technologies, placed 6th in terms of the size of million users by the end of 2025. This is higher than
the market after US, China, Japan, Germany and the market size for all other emerging technologies
UK. Despite a decline, India remains the second in India (consumer IoT estimated at USD 5 billion,
largest market for DeFi among G20 countries in metaverse at USD 2.1 billion and AR/VR estimated
2024. Meanwhile, the overall market for virtual at 789 million in 2024).
digital assets is steadily growing in India and is

5.3. US and China are also the leading adopters of emerging

technologies

The global market for many emerging technologies further between 2023 and 2024. In 2023, US
– internet of things (IoT), metaverse, augmented and accounted for 42 percent, 31 percent, 35 percent,
virtual reality (AR/VR) have grown over the past year, and 27 percent of total revenue in IoT, Metaverse,
with the exception of decentralised finance (DeFi). AR/VR, and DeFi, respectively.47 By 2024, these
The inherent risks in DeFi and the lack of regulatory numbers had gone up to 61 percent, 59 percent, 43
certainty have now allowed its applications to percent and 32 percent respectively (see figure 5.3).
scale to full potential. For other technologies the The increase in IoT, metaverse and AR/VR revenues
growth across countries has been very unequal. US in China, is also of similar proportions, as that in the
remains the dominant player in adoption emerging US.
technologies and its market share has gone up

Fig. 5.3 The gap between US and rest of the world has significantly widened in adoption of emerging
technologies in the past twelve months

Consumer IoT revenue (in billion USD) Metaverse revenue (in billion USD)
100
25
USA
80
USA
20

60
CHN
CHN 15

40
10

20
5
Other Countries
Other Countries IND
IND
0 0
2023 2024 2023 2024

47
Refers to total revenue in the G32 countries.

56
 05. Innovate: Towards a Global Duopoly?

Fig. 5.3 (Contd.) The gap between US and rest of the world has significantly widened in adoption
of emerging technologies in the past twelve months

AR/VR revenue (in billion USD) DeFi revenue (in billion USD)

12 0.5
USA
10
0.4
USA

8 CHN

0.3
6 IND

0.2
4

2 Other 0.1
Countries Other
Countries
IND
0 0.0
2023 2024 2023 2024

Source: ICRIER - Prosus Centre (IPCIDE)

Note: DeFi revenue data is not available for China.

India remains a large consumer of emerging to reach USD 6.4 billion with over 100 million
technologies, placed 6th in terms of the size of the users by the end of 2025.48 This is higher than the
market after US, China, Japan, Germany and UK. market size for all other emerging technologies
Despite a decline, India remains the second largest in India (consumer IoT estimated at USD 5 billion,
market for DeFi among G20 countries in 2024. metaverse at USD 2.1 billion and AR/VR estimated
Meanwhile, the overall market for virtual digital at 789 million in 2024).
assets is steadily growing in India and is expected

5.4. Big money betting on US and China

Two countries – US and China – account for 70 AI companies the much-needed financial muscle
percent of the valuation of unicorns and 80 percent to build capital intensive AI models. According to
of venture capital (VC) investments in AI across Pitchbook data, prompted by the success of Open
the 32 countries in our sample (see figure 5.4). VC AI, startups raised 30 percent higher capital for AI
money chasing startups in these two countries not in 2024, compared to the previous year.49 In China,
only pump up the valuation of startups, it also gives central and local government VC funds invested

48
Goswami, A., & Soundararajan, N. (2025, January 31). Regulating Virtual Digital Assets In India: Balancing Innovation And Risks. Business World.
49
Hu, K. (2025, January 07). AI startups drive VC funding resurgence, capturing record US investment in 2024. Reuters.

57
05. Innovate: Towards a Global Duopoly?

up to USD 912 billion in strategic industries like total value of investments have increased. Sectors
AI. Government investments worked as a signal that received the highest amount of funding were
for the private sector to also up their stake in AI technology and consumer discretionary (including
companies.50 household appliances, cars, leisure products, etc.)
Reportedly, deep tech is likely to become an area
India is a distant third in valuation of unicorns of growth with drones, semiconductors, robotics,
and sixth in VC investments for AI. 2024 saw generative AI and space tech becoming focus areas
a resurgence in funding of tech startups after for investment. 51
muted growth in 2023. Both the deal count and

Fig. 5.4 US and China receive the lion share of VC funds pumping up valuation of unicorns

Share of total valuation of unicorns in G32 Countries Share of VC Investments in AI in G32 Countries
(Total Value = US$ 3,652 billion), 2024 (Total Investment = US$ 93 billion), 2023

1.0 %
0.8 % BRA 2.2%
INS 2.6 % SNG
SNG 2.3 %
1.6 % GER
FRA
0.1 %
CHL
0.6 % 17.8 %
NET CHN 19.6 %
CHN

2.2 %
GER
56.2 % 59.0 %
USA USA 2.2 %
1.1 % IND
AUS
1.5 %
JAP

5.4 % 2.2 %
FRA
IND
2.4 %
0.9 % SKO
SKO

5.2 %
UK 3.3 %
UK

1.4 % 2.0 %
CAN CAN

Source: ICRIER - Prosus Centre (IPCIDE)

5.5. India off to a promising start but a long way to go

India’s strength in the innovation pillar is reflected below the median score for G32 countries. It also
through three key indicators - enthusiastic adopters scores poorly in AI infrastructure and slightly below
of decentralised finance (DeFi), a strong start-up the median in AI research. On AI specifically – gov-
culture and high valuations for unicorns (see Figure ernment programs including the latest Union Bud-
5.5). However, the country lags in relative adoption get’s (2025-26) boost to the India AI mission should
of Consumer IoT and metaverse, with scores much

50
Beraja, M., Peng, W., Yang, D., & Yuchtman, N. (2024, December 01). Government Venture Capital and AI Development in China. Stanford University.
51
Paul, J M. (2024, December 22). VC investments hit $16.7 billion this year powered by tech sector. Business Standard.

58
 05. Innovate: Towards a Global Duopoly?

alter the landscape. The program is supporting the processing units (GPUs) are already being procured
development of the overall ecosystem including under the scheme. A new centre of excellence for
compute capacity, an innovation centre, dataset education was also announced in the Budget, in
platforms, application development, skills, start-up addition to three on agriculture, health and sustain-
financing and governance.52 18,000 plus graphic able cities.53

Fig. 5.5 India’s pockets of innovation

The Global Frontier: Highest Score
by Indicator (normalised to 100)
India
score
DeFi Revenue 66.6
No. of Startups per listed company 45.3
DeFi revenue per user 23.8
Unicorns valuation/ Total stock market valuation 21.9
No. of Start -ups 21.1
5 13
Research in AI 10.0
Unicorn Valuation 9.5
Metaverse Revenues 8.3 6
Consumer IoT revenues per user 7.1 9 12
Metaverse revenue per user 6.9
AR/VR Revenues 6.5
Consumer IOT Revenues 6.1 10
VC Investments in AI as a % of GFCF 7
4.8 21
9
Infrastructure for AI 4.6
VC Investments in AI 3.8 5 15
AR/ VR revenues per user 22
0.1 5

33
30

49

India’s Score Distance From The Frontier Median Score(G32)

Source: ICRIER - Prosus Centre (IPCIDE)

The other new area of AI innovation in India are in Indic languages by pioneering startups such as
domain-specific small language models (SLMs). Sarvam AI. Their model Sarvam-1 is optimised for
These are specialised models with sectoral Indian languages and supports English alongside
applications – healthcare, education, agriculture, ten major Indian languages, including Bengali,
and are not only cheaper but also easier to train Gujarati, Hindi, Kannada, Malayalam, Marathi, Oriya,
and very relevant to localised applications. SLMs Punjabi, Tamil, and Telugu.54 With several such
are poised to play a key role in democratising initiatives, India has an opportunity to truly own and
the adoption of AI models in India. Finally, some power indigenised AI models that can compete in
research is also being pursued in the area of LLMs global markets.

52
INDIAai. (n.d.). INDIAai Mission Pillars.
53
Tech Desk. (2025, February 9). India’s AI strategy: A look at key govt announcements following DeepSeek disruption. The Indian Express.
54
Elets News Network. (2025, January 16). Indian Government Teams Up with Sarvam AI to Build a Sovereign AI Model. eGov Magazine.

59
06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

06

Protect
and
Sustain

60
 06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

Protect and Sustain: Lurking Threats to

Gains from Digitalisation

The Protect (P) and Sustain (S) Pillars have been for example, rising costs of data breaches (see Box
combined into a single group Protect + Sustain 6.1) or estimated energy costs of Large Language
(PS) for two reasons:– (i) both pillars deal with risks Modelling (see Box 6.2). Nevertheless, leaving them
emanating from rapid digitalisation; and (ii) the out from an index measuring digitalisation was not
quality of data available for these two pillars are desirable. As a compromise we include them in the
not as good as for the other three pillars. In other framework, but assign them lower weights (half)
words, they don’t capture the magnitude of some compared to the other three pillars (see Annexure 2
of the critical risks emanating from digitalisation, for more details).

Box 6.1 Rising cost of data breaches

The Cost of Data Breach report 2024 by IBM points to the steadily rising loss to business, cost
of post-breach responses and higher regulatory fines (see Figure below). The 9 percent increase
between 2023 and 2024 is the highest since the pandemic. The healthcare industry has consistently
suffered the highest costs from data breaches (since 2011).

India falls in the list of top 15 countries/regions with the highest data breach costs in 2024. The
report highlights that phishing and stolen or compromised credentials are the most common

5.0 4.9

4.5
4.5 4.4
Average cost in million USD

4.2

4.0
4.0 3.9 3.9 3.9
3.8

3.6
3.5
3.5

3.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: IBM55, Statista56 and RBI57

55
IBM. (2024). Cost of a Data Breach Report 2024.
56
Statista. (2024, September 11). Average cost of a data breach worldwide from 2014 to 2024.
57
Reserve Bank of India. (2024, July 29). Report on Currency & Finance 2023-24: India’s Digital Revolution.
61
06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

initial attack types in India, accounting for 18 percent of incidents each, followed by cloud
misconfiguration (12 percent). According to RBI’s Report on Currency and Finance for 2023-24,
India’s average cost of data breaches increased by 28 percent between 2020-2023.

Box 6.2 Environmental impact of Large Language

Models (LLMs)

According to Holistic AI, the technology industry contributes to 1.5-4 percent of worldwide
emission; out of which Artificial Intelligence (AI), cryptocurrency and data centres contribute to 460
TWh, which is equivalent to 1.8 percent of global energy consumption. To put this into perspective,
five billion YouTube hits of a song consumes the same amount of energy as 40,000 US homes.
It is widely recognised that energy guzzling Large Language Models (LLMs) are having adverse
impact on the environment. While it is difficult to directly compare the energy impact and therefore
operational carbon impact of training different LLMs due to a lack of information available to the
public, some estimations have been provided (see Table). To provide a reference, 25 tonnes of
CO2 eq is roughly equivalent to 30 flights between London and New York.

Model name CO2 eq emissions Power Consumption Number of Parameters

GPT-3 502 tonnes 1287 MWh 175 billion
Gopher 352 tonnes 1066 MWh 280 billion
Bloom 25 tonnes 433 MWh 176 trillion

Source: Holistic AI58 and Nathan Bailey59

6.1. Countries on different trajectories

A quick look at the combined scores for PS Pillar were widely dispersed across countries, signalling
suggest no significant difference in the performance divergence in digitalisation. Second, there is hardly
among countries. Apart from the United States, any difference in score between the developed
which has a score of 60, the PS score for the and developing countries, implying that when it
remaining countries are crowded within a narrow comes to safeguard against risks, all countries have
range (see Figure 6.1). This is different from what significant challenges to scale.
we saw in the other three pillars, where the scores

58
Holistic AI Team. (March 29, 2024). AI and ESG: Understanding the Environmental Impact of AI and LLMs.
59
Bailey, N. (2024, September 02). The Carbon Footprint of LLMs — A Disaster in Waiting? Medium.

62
 06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

Fig. 6.1 Performance of countries on PS Pillar is range bound

70

60
60

50
45 44 44 44 44
43 42 42 42 41
41 40 40
37 37 36 36
40 36 36 35 35 34 34
34 34 34 34 34 33
PS Score

29
30

20

10

0
USA
China
Australia
Germany
Nigeria
Thailand
Brazil
South Africa
Canada
Spain
Argentina
Denmark
Japan
South Korea
UK
Turkey
Ireland
Singapore
Finland
Saudi Arabia
Egypt
France
Chile
Indonesia
India
Belgium
Colombia
Italy
Mexico
Czechia
Russia
Protect Sustain Protect + Sustain

Source: ICRIER-Prosus Centre (IPCIDE)

Note: For the US, Nigeria and Thailand, we couldn’t compute the score for one of the sub-pillars due to missing observations (also see
Annexure 4). But rather than dropping the sub-pillar, we use proxy values for the missing sub-pillar by using similar results as for the rest of
the group, and then use it to estimate the pillar score. These simulated scores are shown by bars with horizontal lines.

The uniformity in the PS scores turns out to be networks. However, they carry the baggage of
the result of two opposing drivers in developed legacy infrastructure that was built long before the
and developing countries. This is seen from a advent of new sustainable choices. Technological
strong negative correlation between P and S, with research has led to the advent of many new
developed countries scoring high on Protect and technologies that support greening of digitalisation,
developing countries performing better on Sustain including the adoption of life cycle assessments
(see Figure 6.2). The results are intuitive – developed that rationalise e-waste and energy consumption.60
countries with their longer history of digitalisation Developing countries that are in the process of
are not only more prone to cyberattacks, they have building digital infrastructure have the opportunity
also invested relatively more in safeguarding their to invest in new sustainable choices.

60
United Nations Conference on Trade and Development. (2024, July 10). Digital Economy Report 2024: Shaping an environmentally sustainable
and inclusive digital future. United Nations.

63
06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

Fig. 6.2 Developed and developing countries follow opposite trends in Protect and Sustain

30

25 CHN

20
BRA
Sustain Score

SAF
15 ARG AUS
SPA
COL CAN
TUR SKO GER
RUS SAR JAP
10 EGY SNG
IND CHL
ITA DEN
INS FRA
MEX BEL UK
5
CZE FIN IRE

0
15 17 19 21 23 25 27 29 31 33

Protect Score

Source: ICRIER-Prosus Centre (IPCIDE)

Note: US has been left out because the P score could not be computed due to missing data

The country ranking on PS reflects their commitment is very vulnerable to cyber security threats and
to address risks of digitalisation. United States not commensurately prepared. Its ranks for
comes out on top in addressing the overall risks of Risk of Attack and Preparedness are 28 and 19,
cyber security and environmental degradation from respectively. According to the Global Cybercrime
unsustainable digitalisation choices (see Figure Index, China ranks third behind Russia and
6.3). It leads by a huge margin on cyber security Ukraine. The country faces severe cybercrime
preparedness and also ranks second on adoption threat, with attacks targeting critical infrastructure
of green technologies, reflecting its focus on and businesses.61 It is also a country from where
addressing both categories of risks. cybercrime originates. As understood, cybercrimes
are usually transnational and require an international
China, the overall second, leads in Green R&D framework for cooperation. Many such global
patents and ranks 13th in commercialisation initiatives are now underway to collectively ward off
of green tech. However, its outcomes on cyber threats of cybercrime, but these are yet to translate
security appear a lot weaker. As per data available into meaningful impact.62
on email leaks and ransomware attacks, China

61
University of Oxford. (2024, April 10). World-first “Cybercrime Index” ranks countries by cybercrime threat level.
62
The Global Forum on Cyber Expertise (GFCE) is one example of a multi-stakeholder community of over 200 Members and Partners including
governments, international organisations, companies, and academics from all regions of the world. The GFCE structures its work around
five themes of cyber capacity identified in the Delhi Communiqué: (1) Cyber Security Policy and Strategy (2) Cyber Incident Management and
Critical Infrastructure Protection (3) Cybercrime (4) Cyber Security Culture and Skills (5) Cyber Security Standards.

64
 06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

India’s poorest performing pillar in the CHIPS preparedness (26), followed by Green R&D (23). We
framework is PS. The overall rank for India in the discuss India’s performance in Section 6.4.63
PS pillar is 25, and the lowest ranking sub-pillar is

Fig. 6.3 Countries at varying outcome levels in addressing cyber security and sustainability risks
PROTECT SUSTAIN

Country Protect + Sustain Preparedness Risk of Attack Green Tech Green R&D

USA 60 93 NA 46 43
CHN 45 8 70 34 68
AUS 44 23 91 18 45
NIG 44 NA 100 34 NA
GER 44 33 94 30 20
THA 44 2 99 31 NA

BRA 43 5 92 30 45
SAF 42 6 99 35 30
CAN 42 18 95 29 28
SPA 42 15 93 24 35
ARG 41 4 98 41 21
DEN 41 34 97 21 11
JAP 41 19 97 20 25
SKO 40 13 97 31 19
UK 37 28 94 25 3
TUR 37 3 98 48 NA
IRE 36 29 97 18 1
SNG 36 38 67 22 17
SAR 36 2 98 40 2
FIN 36 22 96 22 1
EGY 35 1 99 41 NA
FRA 35 21 89 25 5
CHL 34 4 96 36 NA
INS 34 5 96 35 NA

IND 34 (Rank #25) 3 (#26) (#16) 96 35 (#10) 1 (#23)

MEX 34 6 98 29 1
ITA 34 13 93 25 3
COL 34 3 75 36 21
BEL 34 11 98 25 NA
CZE 33 14 98 24 NA
RUS 29 13 57 38 9

Source: ICRIER-Prosus Centre (IPCIDE)

Note: N.A. – Data not available

63
We have dropped Netherlands from the discussion for a purely technical reason. Mathematically, it ranks at the bottom of the pillar, giving an
impression of poor preparation to looming risks. This however is the result of missing data for Netherlands on risk of attacks and algebraically
results in a lower score following the rules laid out for aggregation in the framework. If we were to use a proxy for Netherlands – example, the
average risk of attack similar to in northern Europe and UK (including countries like Denmark, Finland, Belgium, and Ireland and UK) – it would
actually come out on top, ahead of the United States, collectively for Protect and Sustain. Such dramatic variation in the rank and score for
Netherlands on account of one missing variable is unfortunate, and led to our decision to exclude it from the discussion here.

65
06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

6.2. Preparedness for cybersecurity is growing

Comparing data for G20 countries finds that the In comparison, growth in number of secure servers
preparedness for cybersecurity is growing, albeit was significantly higher (see Figure 6.4). An average
slowly in overall spending (see Figure 6.4). The increase of 48 percent among G20 countries, with
average increase in cyber security spending among India yet again, recording the highest growth –
G20 countries was 8.8 percent. India recorded the doubled the number of secure servers between
highest growth (14.5 percent), though from a low 2023 and 2024, matching the median values for the
base. The reported spending for India in 2024 group in 2024. Despite these improvements, India’s
amounted to USD 2.9 billion, lower than the average ranking in the Preparedness sub-pillar is abysmally
for G20 countries, i.e., USD 3.5 billion for the same low (26), indicating huge efforts the country has
year.64 to make to match up to the level of other countries
(discussed further in Section 6.4).

Fig. 6.4 India’s emerging fintech landscape

Cybersecurity spending in mn USD Number of Secure Servers

10,00,00,000 10,00,00,000
USA USA

CHN
IND CHN
10,00,000 10,00,000 IND

Other
Countries

10,000 10,000
Other
Countries

100 100

2023 2024 2023 2024

Source: ICRIER-Prosus Centre (IPCIDE)

Note: The Y Axis increases in a log scale.

64
Statista. (n.d.). Cybersecurity-Worldwide.

66
 06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

6.3. Developing countries are making sustainable digitalisation

choices

The sub-pillar on commercialisation of green tech is data centres & investing in software, the share
interestingly led by developing countries. Besides of green technologies is significantly higher; i.e.,
US, all countries within the top 10 are developing relative scores for developing countries are higher
countries. The outcomes are a result of combing (see Figure 6.5). While developed countries benefit
absolute and relative metrics of sustainable from legacy infrastructure, they incur extra cost and
digitalisation, where developed countries have effort in transforming them to green technologies.
larger markets - US clearly an outlier in terms of its Developing countries, on the other hand, have a
overall spending on commercialisation of green unique opportunity for greenfield investments in
tech. As discussed above, for developing countries, sustainable digital technologies.
which are still building digital infrastructures like

Fig. 6.5 Developing countries are spending relatively more on sustainable digital technology

90
Relative Score (Commercialisation of Green Tech sub-pillar)

80

70
ine
TUR °L
45
60 ARG
EGY
SAR
50 CHL RUS
SAF
INS IND
40 NIG
THA BRA
MEX
SKO
30 CHN
BEL CAN
GER
FRA
20 FIN US
DEN UK
IRE JAP
10 AUS

0
0 10 20 30 40 50 60 70 80 90

Absolute Score (Commercialisation of Green Tech sub-pillar)

Emerging & Developing Economies Advanced Economies

Source: ICRIER-Prosus Centre (IPCIDE)

67
06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

6.4. India needs to step up its effort in cybersecurity

and sustainable digitalisation

India’s large population gives it the advantage digitalisation if commensurate efforts are not made.
of scale but also creates risk of cyber threats In three out of four indicators for Protect and seven
and environmental degradation due to rapid out of nine indicators in Sustain, India is below the
digitalisation. The high scores illustrated in Chapter median. While previous subsections illustrate the
4 on Harness can easily be dampened by poor efforts made by India, more needs to be done.
performance in cyber security and sustainable

Fig. 6.6 India’s below average performance in Protect and Sustain

Country with the highest indicator

India score (normalised to 100)
score

95.7 Ransomware attacks 97

91.1 Email leaks 99
66.3 E-waste generation 94
32.1 Sustainable Electronics
7.8 5
Energy Management Software 2
6.0 EHS software 1.9
3.7 Green data centres 2.8
3.4 Cybersecurity revenue 3
2.2 Secure servers 1.7
0.2 Smart grid patents 0.7
0.2 ICT electromobility patents 0.7

Protect Sustain G32 Mean

Source: ICRIER-Prosus Centre (IPCIDE)

68
 06. Protect and Sustain: Lurking Threats to Gains from Digitalisation

India however, stands to gain from adoption Aadhaar based electronic KYC (eKYC) has helped
of digitalisation for sustainable development, minimize paper waste; Digilocker, the government’s
with successful deployment of its digital public initiative on paperless governance, is also expected
infrastructure (DPI). A recent case study from the US to reduce the need to store, print and carry paper
shows that nearly 99 percent of environmental costs certificates, collectively lowering environmental
of cash (paper currency) comes from distribution costs through digitalization. Similar use cases for ID
and operation, which is reduced with a digital and credentials could improve efficiency of citizen
payment platform like Unified Payment Interface services, while reducing environmental costs.
(UPI) (see Figure 6.7). Other applications such as

Fig. 6.7 Lifecycle estimate of the total environmental cost of a 1 USD cash note in the
United States

Greater contribution as US
has more cars, spread over
greater distances

$2.17 $2.20

End of life
contributes
minimally or
negatively due to
material recycling

$0.03 $-
Production Operation End of life Total environmental
stage stage stage cost of cash

Source: Digital Planet, Tufts University

However, balance needs to be maintained between other words, new technology should be powered
sustainable digitalization and digitalization for through clean energy, improved engineering and
sustainability. In pursuit of the latter, technology that minimum waste.
promotes sustainability must not be overlooked. In

69
07. Afterword

07

Afterword

70
 07. Afterword

CHIPS as a Policy Tool

CHIPS is not just a framework for measuring the spectrum of digitalisation – Connect, Harness,
digitalisation and ranking countries (or states, in Innovate, Protect and Sustain. Micro-level inputs
the sub-national context) on their performance, it for each indicator, enable decision making on the
can be a useful diagnostic tool for policymakers to directionality of policy and the necessary resource
identify gaps and design interventions. In a macro allocation. In other words, CHIPS enables evidence-
sense, the framework helps benchmark a country based policymaking, by anchoring the diagnosis
to world frontiers and world averages. Comparison and policy choices through data and comparisons.
is also possible within different country groupings –
G20, BRICS, European Union and notable countries In the following sections, we provide illustrative
from ASEAN, Latin America and Africa.65 examples of how CHIPS can be used as a diagnostic
tool for day-to-day policymaking.
Additionally, the modular design of the CHIPS
framework allows for isolation of pain points, across

7.1. Creating Digital Heatmaps

The CHIPS framework can be used to generate the many useful insights. At first glance, the number
digital heatmap of a country – a commonly used of green and dark green cells, highlight that India
two-dimensional data visualisation technique that performs above the G32 average in 33 out of 47
shows distribution of values using a set of colours. indicators in CHIPS Economy. The colour spread
It provides a visual summary of the information changes drastically for CHIPS User, with fewer
available, highlighting the relevant data points. green cells - only 14 out of 47 indicators. Second,
The digital heatmap similarly provides a snapshot India’s best performing pillar is the Harness pillar,
of the country’s performance on digitalisation, both for the Economy and for the User, while its
highlighting areas of strengths and weaknesses, by worst performing pillar is Protect and Sustain. Third,
mapping 47 indicators, across sub-pillar and pillars. the biggest contrast between the economy and
the user is in the Connect pillar, where it exceeds
The heatmap can be generated at the economy G32 average in 8 of the 11 indicators for CHIPS
level (CHIPS Economy), at the user level (CHIPS Economy, while falling short of G32 average in 9 of
User), or a combination of both (CHIPS Combined). the 11 in CHIPS User.
While the illustration below uses the group average
to create the map, different benchmarks could be The ability to quickly identify these keys trends
used, i.e., a peer country, average of peer group and also over time, can be an important input for
countries or the country at the frontier. policymaking.

We illustrate this by showing the heatmap for India

(see Figure 7.1). The visual summary provides

65
We hope to continue expanding the set of countries included in CHIPS

71
07. Afterword

Fig. 7.1 Comparing India’s performance on digitalisation with respect to G32 average

CHIPS
Indicator Score = India Score – Average Score
Economy

I1 I2 I3 I4 I5 I6 I7 I8 I9 I10 I11 I12 I13 I14 I15 I16

Connect 30 28 -13 15 17 -27 65 54 89 53 -84

Harness 69 31 29 18 23 54 -1 58 13 28 8 -4 39 64 57 0

Innovate -2 -10 -2 16 4 -1 -4 0 54

Protect +Sustain -3 -3 5 -3 -5 0 -1 21 -22 -8 -8

CHIPS User Indicator Score = India Score – Average Score

I1 I2 I3 I4 I5 I6 I7 I8 I9 I10 I11 I12 I13 I14 I15 I16

Connect 0 -12 -56 -5 17 -27 -67 -47 5 -55 -14

Harness 25 -11 -31 -33 -1 -15 -36 10 21 -31 -47 -7 -35 -46 61 8

Innovate -2 -10 -4 25 0 -26 -5 -42 -6

Protect +Sustain -27 -22 7 12 -24 10 -5 13 58 -24 -30

Note: The names of the indicators associated with each pillar, represented alphanumerically here (column head) can be found in
Annexure 1; A negative number implies India’s score is lower than the median score and vice-versa.
Source: ICRIER-Prosus Centre (IPCIDE)

7.2. Digital Diffusion Pyramid (DDP)

The diffusion of digital services is a complex diffusion using the CHIPS dataset is to create Digital
journey for countries, with governments navigating Diffusion Pyramids (DDP).
challenges of infrastructure, literacy, and other
economic and social constraints. In the CHIPS The idea is similar to the population pyramid or the
framework, countries that have an edge in Connect demographic pyramid which provides the structural
and Harness, i.e., adoption of internet, smartphones composition of population by age, gender, etc.66 We
and digital services, are able to push up their overall start with the percentage of population covered by
score. To view a country’s progress on digital LTE (this is close to universal for most countries), and

66
PopulationPyramid.net. (n.d.). Population Pyramids of the World from 1950 to 2100.

72
 07. Afterword

gradually move up with percentage of population internet –a gap of 41 percent. The gap increased
using internet, smartphones and then a series of by another 10 percentage points, with only 48
digital services. percent owning a smart phone. At each stage of the
pyramid, some Indians are left behind and by the
We illustrate by creating the DDP for India and time we reach the use of digital health apps, India
comparing it with median and frontier values of has nearly 88 percent of its population left behind.
G32 (see Figure 7.2). India’s skinny pyramid implies The corresponding number for the G32 median is
slower diffusion of digital technologies, compared 74 percent and for frontier country is 59 percent.
to both the median as well as the frontier. In other
words, stouter pyramid implies higher diffusion and A skinny pyramid is also a huge opportunity for
vice versa. countries like India, to expand the adoption of
services, thereby generating more growth, jobs and
India’s DDP shows 99 percent of Indians are improved service delivery.
covered by LTE, though only 58 percent access the

Fig. 7.2 Digital Diffusion Pyramid for India

Indicators India (2025) G32 Median G32 Frontier

ChatGPT* 2 4 7

12 26 41
Digital health apps
conversion

Social media 17 28 64
100:26

100:41
99:12

for work
22 46 65
Food delivery platforms

23 51 73
Video on demand

28 52 81
E-com users

49 82 97
Smart phone

58 93 100
Internet

Population 99 100 100

covered by LTE

% of Population

Source: ICRIER-Prosus Centre (IPCIDE)

Note: * The number for median ChatGPT was approximated by using the 2025 number of user’s in Brazil, the median country as per the AI
sub-pillar.

73
07. Afterword

7.3. Digital Drill Down

One of the interesting features of the CHIPS from the global frontier. The CHIPS framework
framework is that there is a clear line of sight from the makes this complex task fairly straightforward. The
indicator to the final score. This not only makes the policymaker could also use a peer country or the
framework fairly transparent, but it also creates an group average as the benchmark. In the example
opportunity to unpack and disaggregate the score, illustrated below, we use the global frontier for the
from aggregate to pillar level, then to sub-pillar Digital Drill Down (DDD)
level and finally to the indicator level. This is similar
to the commonly deployed drill down technique In DDD, one starts by looking at the pillar that
for problem solving – breaking down complex is furthest from the frontier, which in our case is
problems into its elements and finding a solution to Innovation. The next step is to look for the sub-
each factor, with the overall aim of solving the key pillar that is furthest from its corresponding frontier,
problem.67 which turns out to be AI in case of India. The last
step is to find the indicator that is furthermost from
For example, let’s say an Indian policymaker is the frontier and that turns out to be infrastructure for
interested in finding out the weakest link in our AI (see Figure 7.3).
digital ecosystem or the indicators that are furthest

Fig. 7.3 Digital Drill Down for India

Connect (24)
CHIPS (30)

Harness (27)

Distance from Innovate(66) Investment and

the frontier Startups (57)

Protect+
Sustain (26) AI (81) Research in
AI (44)

Other Emerging
Technologies (62) Infrastructure for
AI (82)

VC Investments in
AI (30)

Source: ICRIER-Prosus Centre (IPCIDE)

67
Accipio. (n.d.). Drill Down Technique

74
 07. Afterword

Based on the DDD, Infrastructure in AI, is among nations. With the advent of Deepseek there is reason
the 47 indicators for digitalisation, that needs most to believe that foundational models may not be as
attention in India. Infrastructure in AI has been an capital intensive as was initially believed and that
area of policy debate in India, given its significant they do not require the most sophisticated GPUs. Its
policy trade-offs. The high capital costs and energy reassuring that the government has recognised the
requirements did raise concerns about whether infrastructures gap and announced enhancement
India should focus on building foundational layers to the IndiaAI mission in 2024-25 budget, which
of the AI value chain or focus more on incremental aims to address this failure and guide the building
innovation and use cases. As a result, they may have of compute capacity in India.
lost some precious time in, lagging behind lead

7.4. Unpacking digitalisation at the sub-national level

The SIDE 2024 report provided the CHIP score for compare their performance sub-nationally as well
major Indian States.68 It showed that Southern and as with other countries, if relevant. Policymakers can
Western States are far advanced in digitalisation that use these tools - digital heatmaps, digital diffusion
the Eastern and Northern States. The 2025 iteration pyramid and the digital drill downs at the state-level
will be released later this year. This report will help for better scrutiny and policy interventions.
identify the national frontier and allow states to

68
It was CHIP and not CHIPS, since we could not find reliable data for sustainability at the sub-national level.

75
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78
 09. Annexures

Annexures

Annexure 1: List of Countries and List of Indicators

Table A1 List of Countries

Argentina ARG Ireland IRE

Australia AUS Italy ITA
Belgium BEL Japan JAP
Brazil BRA Mexico MEX
Canada CAN Netherlands NET
Chile CHL Nigeria NIG
China CHN Russia RUS
Colombia COL Saudi Arabia SAR
Czechia CZE Singapore SNG
Denmark DEN South Africa SAF
Egypt EGY South Korea SKO
Finland FIN Spain SPA
France FRA Thailand THA
Germany GER Turkey TUR
India IND UK UK
Indonesia INS United States USA

Table A2 Indicator List for CHIPS Absolute, Relative and Combined

CHIPS
Year of
Indicator Unit Short Form Data Source (Relative/ Notes
data
Absolute)
Price of mobile PPP$ Absolute
Price of mobile
data and voice % of monthly 2023
data (HC) ITU Relative
basket (HC) GNI
Price of mobile PPP$ Absolute
Price of mobile
data and voice % of monthly 2023
data (LC) ITU Relative
basket (LC) GNI
PPP$ Price of Absolute
Price of cheapest
% of monthly cheapest A4AI 2021
smartphone Relative
GNI smartphone

Price of fixed PPP$ Price of fixed Absolute

broadband % of monthly broadband ITU 2023
internet in USD internet Relative
GNI
Median Mobile Mobile As on
Absolute and Same for Relative
Download Mbps download Speedtest September
Relative and Absolute
Speeds (Mbps) speed 2024
Median Fixed
Fixed As on
Broadband Absolute and Same for Relative
Mbps broadband Speedtest September
Download Speed Relative and Absolute
speed 2024
(Mbps)

79
09. Annexures

CHIPS
Year of
Indicator Unit Short Form Data Source (Relative/ Notes
data
Absolute)
Absolute Apexx, Data 2024 or
Absolute
Numbers reportal, latest
Statista,
Number of
Internet users World Bank,
Internet Users 2024 or
% of population ITU, Eurostat, Relative
China Internet latest
Overview
Absolute
Absolute
numbers
Mobile Cellular Mobile cellular
Subscriptions ITU 2023
Subscriptions subscriptions
per 100 Relative
population
Absolute
Population ITU and World Absolute
numbers LTE coverage 2023
covered by LTE Bank
% of population Relative
Absolute Newzoo via
Absolute
numbers Statista and
Apexx for Brazil,
Number of Smartphone 2023 or
Argentina,
smartphone users users latest
% of population Australia, South Relative
Korea, Canada,
Indonesia, Italy.
To estimate -
percentage point
gender gap is
Gender gap multiplied by the
in number of number of women
women needing Absolute Digital gender Calculated 2023 or in the population
Absolute
to connect to numbers gap from ITU and 3i latest to arrive at the
reach parity with additional number
male users of women required
to match the share
of male internet
users
Gender gap percentage
in percentage Digital gender Calculated 2023 or point divided
% Relative
population using gap from ITU and 3i latest by population
the internet penetration rate
No. of internet
users (16-64 Absolute
Absolute
years) using Social media
numbers % of Datareportal 2024
social media usage for work
internet users
for work related Relative
activities

Number of users Millions Absolute

Digital food
of digital food % of internet Statista 2024
delivery users Relative
delivery platforms users

Number of users Millions Absolute

Digital health
of digital health % of internet Statista 2024
users Relative
applications users
Number of Millions Absolute
E-commerce
e-commerce % of internet Statista 2024
users Relative
users users

80
 09. Annexures

CHIPS
Year of
Indicator Unit Short Form Data Source (Relative/ Notes
data
Absolute)
Billions Absolute As of
Number of mobile Mobile app Business of
per internet November
app downloads downloads apps, Statista Relative
users 2024,

Number of video Millions Video-on- Absolute

Statista 2024
on demand users % of internet demand users Relative
Fixed-broadband Exabytes Absolute
Fixed
Internet traffic GBs per ITU 2023
broadband Relative
EBs subscriber
Mobile Exabytes Absolute
broadband Mobile
GBs per ITU 2023
internet traffic broadband Relative
EBs subscriber

Value of digital Billion USD Absolute

Digital
payment
PPP$ per payments Statista 2024
transactions in Relative
internet users value
billions of dollars
Number of Absolute
Absolute
people who numbers Digital
Findex 2021
made or received % of internet payment users
a digital payment Relative
uses
Number of Absolute
Absolute
people (age 15 numbers
+) who received Digital private
Findex 2021
private sector sector wages
wages into an % of population Relative
account

Billion PPP$ Absolute

Value of neo Neobanking
banking transaction Statista 2024
transactions Billion PPP$ value
per internet Relative
user
Number of Absolute
Absolute
people who numbers
received public Digital public
Findex 2021
sector wages into sector wages
an account (age % of population Relative
15 +)

Absolute
Individuals Absolute
numbers
who received
government % of Digital govt
transfer or government Findex 2021
pension
pension into an transfer or
account (age Relative
pension
15 +) recipients, (age
15+)

Million USD Absolute

ICT Services ICT service
World Bank 2023
Export % of service exports
Relative
exports, BoP,

81
09. Annexures

CHIPS
Year of
Indicator Unit Short Form Data Source (Relative/ Notes
data
Absolute)
The country-
wise MSCI sector
weight for ICT was
multiplied with the
ICT Market Wikipedia,
Absolute USD ICT market cap Absolute 2022 total stock market
Capitalization MSCI
capitalisation
to arrive at the
ICT market
capitalisation
MSCI ICT index Sector weights
ICT market cap MSCI Relative 2024
sector weights % in %
USD ICT Value STAN, World G20 Absolute
ICT Value Added 2023
% of GDP Added Bank G20 Relative
Research in AI
(STEM, Model
Research,
Part of The
Foundational AI Absolute and
Index score Research in AI Tortoise Media 2024 Global Artificial
research, Applied Relative
Intelligence report
AI research,
Educational
institutions)
Infrastructure
for AI (Weighted
Infrastructure Absolute and
avg of GPU, Index score Tortoise Media 2024
for AI Relative
supercomputing,
semiconductors)
For denominators:
FRED for US GFCF
Million of USD OECD.AI Absolute (Q3 2023 value).
VC FRED for Japan
Venture Capital
investments 2023 GFCF. GFCF as a
Investments in AI
in AI percent of GDP
Millions of USD multiplied by GDP
OECD.AI, FRED Relative
as a % GFCF values, both taken
from World Bank.
Absolute
Absolute
numbers As on The listed company
Number of Startupranking.
Per listed Startups November list for countries is
Startups com
company on Relative 2024 from 2022
the

Billions of USD Absolute

Valuation of Unicorn
CBinsights
Unicorns % of total valuation
stock market Relative 2023/2024
valuation
Billions PPP$ Absolute
Consumer IoT
per internet Consumer IOT Statista 2024
revenues Relative
user
Millions PPP$ Absolute

AR/ VR revenues as a % of AR/VR Statista 2024

smartphone Relative
users

82
 09. Annexures

CHIPS
Year of
Indicator Unit Short Form Data Source (Relative/ Notes
data
Absolute)
Billions PPP$ Absolute
Metaverse per Metaverse Statista 2024
revenue smartphone Relative
user
Million PPP$ Absolute
DeFi revenue per internet Defi Statista 2024
Relative
users
Absolute
Absolute
Number of Secure numbers
Secure servers World Bank 2023
servers Per million
Relative
population
Billion USD Absolute
Cybersecurity Cybersecurity
as a % internet Statista 2024
revenue revenue Relative
users
Averages
30 day Average Absolute taken in the
Ransomware
Ransomware months of
attacks 30-day Kaspersky
attacks November-
average % of internet
Relative December
users 2024
Total number Absolute
Absolute
of email leaks numbers
2021 Q3-
(Quarterly Email leaks Surfshark
per internet 2024 Q3
average) (2021 Relative
Q3- 2024 Q3) user

% of respondents
who are % of survey G20 Absolute
Online privacy IPSOS 2019
concerned about respondents and Relative
online privacy
% of respondents
% of survey G20 Absolute
who say they trust Online Trust IPSOS 2019
respondents and Relative
the internet
USD million Absolute
Green Data % of total Green data
Mordor 2023
Centre data centre centres Relative
revenues
EHS software Million USD EHS software Mordor Absolute 2023
Market Size
Energy
of Energy
Million USD management Mordor Absolute 2023
Management
software
Software
Market Size
In the relative index,
of Energy
EHS and EMS have
Management % of total
been merged.
Software and software - Mordor Relative 2023
Software revenues
EHS software % revenues
were taken from
of total software
Statista
revenues
Share of digital
Digital energy average of the two
startups in total Share IEA G20 Relative 2022-2023
startups years
energy startups

83
09. Annexures

CHIPS
Year of
Indicator Unit Short Form Data Source (Relative/ Notes
data
Absolute)

Million USD Absolute

Sustainable share of Sustainable The denominator

Mordor 2023
Electronics revenue electronics is cosumer
Relative
from total electronics from
electronics Statista
in million kgs Absolute
E-waste E-waste E-waste
kg per internet 2022
generated generation Monitor Relative
user
Absolute
Absolute
Smart grid numbers Smart grid
IRENA 2000-2023
patents % of total patents Total patents was
Relative
patents taken from WIPO
Absolute
ICT in ICT in Absolute
numbers Total patents was
electromobility electromobility IRENA 2000-2023
% of total taken from WIPO
patents patents Relative
patents filed

Annexure 2: CHIPS Framework and Methodology

The CHIP framework was conceptualised in 2023 are included in the index, measures of digital literacy
with the forethought to analyse the state of digital which enable adoption have not been included.
economies and their transformation through varying
approaches adopted by countries. The framework In addition to presenting a 2025 index for the G20
was organized around four pillars – Connect, countries based on the latest available data, this
Harness, Innovate and Protect – that capture year’s report expands the analysis to include more
key aspects of digital transformation, enabling countries69 bringing it to a total of 32. The list started
comparison across countries and over time. The with 60 countries (both Emerging and Developing
second iteration in 2024 expanded the framework Economies, and Advanced Economies) which was
to include a fifth pillar – sustainability. CHIP was then narrowed down to 32 countries (G20 + 12
transformed to CHIPS. The repository of indicators countries) based on following criteria: (1) population
under each pillar has substantially expanded, greater than 15 million (2) top 60 countries by GDP
enabling the computation of a composite index. In and (3) non-missing values for key indicators like
addition to the overall CHIPS score, disaggregated smartphone users and internet users and data for
scores by pillar and sub-pillar allow for more modular at least 85 percent indicators. The 2025 G32 index
and in-depth analysis. Like last year’s report, this is presented separately from the 2025 G20 index
year’s report also distinguishes between outcomes as it includes some new indicators that replaced
and inputs. So, while outcomes are quantitatively old ones where data was either not available or
measured in the index, enablers are qualitatively we found an alternate that was more relevant and
discussed to explain the resulting outcomes. For with a wider scope. (See Table A1 for a full list of
instance, while measures of digital service adoption indicators)

32
Definition of Emerging and Developing and Advanced Economies have been taken from the IMF’s WEO

84
 09. Annexures

Calculations of index

We construct two versions of the index - the CHIPS highest. For indicators where higher values indicate
(Economy) which captures outcomes at scale a less desirable outcome (e.g., cost, number of
and the CHIPS (User) which captures outcomes cyberattacks), the scale is inverted. In this case, the
for a representative user. Both versions of the formula is as follows:
index consist of similar indicators, but the latter is
normalized by the relevant unit (e.g., population, (Max - Value)
number of internet users, GDP, etc.). A total of 47 Standardised Value = x 100
(Max-Min)
indicators are grouped into 14 sub-pillars, which are
then categorised under the 5 pillars of CHIPS.
A number of other methods of standardisation,
In order to enable comparability and aggregation including a z-score standardisation, were
into an index, each indicator is standardised as considered before arriving at this one. This current
follows: method was chosen over the z-score method to
ensure the index is not overly dominated by values
of outliers, reducing its ability to reflect variation
(Value - Min)
Standardised Value = x 100 within the remaining values. The other methods
(Max-Min) of standardisation, including the z-score one, were
used to assess the sensitivity of the overall findings.
The correlation between the values and indices
This standardized all values to a scale between 0 calculated using the different methods were
and 100, with 0 being assigned to the lowest value relatively high, serving as a robustness check for
in the range for the G20 countries and 100 for the the final results.

CHIPS 2024 (revised) and 2025

The CHIPS Economy and CHIPS User for G20 are cybersecurity patents was also dropped for G32 and
based on 2024 indicators, but an updated value the AI indicators for github and publications were
where available. This year a series called 2024 replaced by composite scores on AI infrastructure
new was created as certain databases and sources and AI research from Tortoise Media’s recent AI
were found to have either revised their numbers index. ICT value added was also replaced by IT
substantially or if the data had completely changed. market capitalisation.
This was necessary to allow for a comparison of
2024 and 2025 among G20 countries where the old The methodological calculation of the index is the
framework with 16 sub pillars and 50 indicators has same as G20 computation. The change in indicators
been used. does not drastically change India’s ranking as most
countries have moved more or less in the same
For the G32 index calculation, there are 14 pillars direction. This iteration delineates these differences
and 47 indicators that form the index- Trust pillar was and the changes in India’s ranking and scores are
dropped and Finance (private) and Finance (public) discussed in the main text.
was merged to be called fintech. The indicator on

85
09. Annexures

Weighting

The index is calculated as a weighted average of to the overall CHIPS score is then derived by
the indicators. The weighting of indicators has assigning equal weights of 1/4 to each of the three
been designed carefully to ensure commensurate pillars C, H and I and 1/8 to each of the two pillars
representation of each of the key aspects covered. P and S. The Protect and Sustain pillars are given
Within each sub-pillar, weights are assigned lower representation in the index due to limitations
equally to indicators such that they add up to 1. A in data availability and data quality, although we
few indicators for which new data was not available believe that both these pillars are equally important
were assigned reduced weights in order to reflect in ensuring a robust, resilient and inclusive digital
their outdated nature and keep the index as current economy. To summarize, the weighting scheme is
as possible. For example, the indicator “% of internet therefore designed such that the three pillars of C,
users who received private sector wages into an H and I are equally represented while the pillars of P
account” is based on older data from 2021. This and S are given half the representation as the other
indicator is part of the Fintech (private) sub-pillar three. Each pillar is composed of a set of sub-pillars
which has a total of 4 indicators. The weights are that contribute equally.
then calculated as:
Aggregation from indicator to sub-pillar:
X =1
3X +
2 Equation 1:

n
where x represents the weights for the 3 indicators
∑(Wi X Vim) such that ∑Wi = 1
with updated data and (x/2) represents the weight
i=1
for the indicator with the older data. Please refer
to Table A2-A4 for the weights of each indicator
in the different indices. In the case that values for
an indicator are missing for a country, the weights where i represents each indicator within the given
are readjusted only for that country such that the sub-pillar, n represents the number of indicators
weights for the non-missing indicators in that sub- within each sub-pillar and m represents each
pillar add up to 1 (Refer to table A6 for a list of country. Wi is therefore the weight for indicator i and
missing data for countries). Again, for the next level Vim the value of indicator i for each country m. The
of aggregation from sub-pillar to pillar level, weights list of indicators and their weights in the sub-pillar
are assigned to each sub-pillar such that they add are provided in the tables A2-A5 below.
up to 1 for each pillar. The final level of aggregation

Calculation of the CHIPS Overall from the CHIPS (Economy) and

CHIPS (User):

This year’s iteration also has an updated Economy and CHIPS User indicators are done at
methodology to provide a holistic view of India’s the sub-pillar level. Each of the two versions of
Digital Economy. The CHIPS Economy and User the relevant indicator is assigned half its original
indices have been combined to highlight and weight and then aggregated into the sub-pillar as
present unique challenges and successes in the shown above in Equation 1. This provides an overall
developing nations. The combining of the CHIPS score for each sub-pillar, with both the Economy

86
 09. Annexures

and User indicators contributing equally to the get CHIPS Combined pillar scores, which are then
final computation. Subsequently, these CHIPS finally aggregated into a final CHIPS Combined
Combined sub-pillar scores are then aggregated to score.

Table A3 Weighting for G20 CHIPS Economy, User and Combined

CHIPS CHIPS CHIPS

Pillar Sub -Pillar Indicator
Economy User Combined
Price of mobile data and voice basket (HC) 2/7 2/14
Price of mobile data and voice basket (HC)
2/7 2/14
(% of GNI PC)
Price of mobile data and voice basket (LC) 2/7 2/14
Price of mobile data and voice basket (LC)
2/7 2/14
(% of GNI PC)
Affordability
Price of cheapest smartphone in USD 1/7 1/14
Price of cheapest smartphone (% of GNI
1/7 1/14
per capita)
Fixed (broadband) internet price, USD 2/7 2/14
Price of fixed broadband internet (% of
2/7 2/14
GNI)
Median Mobile Download Speeds (Mbps) 1/2 1/2 1/2
Quality Median Fixed Broadband Download
1/2 1/2 1/2
CONNECT Speeds (Mbps)
Number of internet users 1/5 1/10
Percent of population using the internet 1/5 1/10
Mobile cellular subscriptions 1/5 1/10
Mobile Cellular Subscriptions per 100
1/5 1/10
population
Population covered by LTE 1/5 1/10
Percent of Population covered by LTE 1/5 1/10
Access
Number of smartphone users 1/5 1/10
Percent of population using smartphones 1/5 1/10
Gender gap in population using the
1/5 1/10
internet (percentage points)
Gender gap in percentage population
using the internet (percent - percentage 1/5 1/10
point divided by population percentage)
Number (16-64 years) using social media
1/6 1/12
for work related activities
Percent of internet users (16-64 years)
using social media for work related 1/6 1/12
activities
App
HARNESS Number of users of digital food delivery
economy 1/6 1/12
platforms
Percent of internet users using digital food
1/6 1/12
delivery platforms
Number of users of digital health
1/6 1/12
applications

87
09. Annexures

CHIPS CHIPS CHIPS

Pillar Sub -Pillar Indicator
Economy User Combined
Percent of internet users using digital
1/6 1/12
health applications
E-commerce users 1/6 1/12
Percent of internet users using
1/6 1/12
e-commerce users
App Number of mobile of app downloads (in
1/6 1/12
economy billions)
Number of mobile app downloads per
1/6 1/12
internet user
Video On Demand Users 1/6 1/12
Percent of internet users using video on
1/6 1/12
demand users
Total monthly fixed broadband internet
1/2 1/4
traffic (GB)
Monthly Fixed-broadband Internet traffic
1/2 1/4
Data per subscriber (EB)
Intensity Total monthly mobile broadband internet
1/2 1/4
traffic (GB)
Monthly Mobile broadband Internet traffic
1/2 1/4
per subscriber (EB)
Value of digital transactions in billion
2/8 2/16
dollars
Value of digital payment transactions
2/8 2/16
(PPP$ adjusted) per internet user
HARNESS
Number of people who made or received a
1/8 1/16
digital payment
Percent of internet users who made or
1/8 1/16
received a digital payment
Number of people who received private
1/8 1/16
sector wages: into an account (age 15+)
Percent of population (age 15 +) who
received private sector wages into an 1/8 1/16
account
Neo banking Transaction value (absolute) 2/8 2/16
Fintech
Value of neo banking transactions (USD
PPP exchange rate adjusted) per internet 2/8 2/16
user
Number of people who received public
1/8 1/16
sector wages: into an account (age 15+)
Received public sector wages: into
an account (% of public sector wage 1/8 1/16
recipients, age 15+)
Individuals who received government
transfer or pension into an account (age 1/8 1/16
15 +)
Received government transfer or pension:
into an account (% of government transfer 1/8 1/16
or pension recipients, age 15+)

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 09. Annexures

CHIPS CHIPS CHIPS

Pillar Sub -Pillar Indicator
Economy User Combined
ICT service exports (BOP current $) in
1/2 1/4
million USD
Real ICT service exports (% of service exports,
HARNESS 1/2 1/4
Economy BoP)
ICT Value added (absolute USD) 1/2 1/4
ICT value Added as a Percent of GDP 1/2 1/4
AI Publications 1/3 1/6
AI publications as a % of all publications 1/3 1/6
Contributions to Global AI Projects (%) 1/3 1/3 2/6
AI
VC Investments in AI in Mn USD 1/3 1/6
VC Investments in AI (millions of USD) as a
1/3 1/6
percent of GFCF
Number of start -ups 1/2 1/4
Number of Startups per listed company 1/2 1/4
Investments and
Total Unicorn Valuation in billion USD 1/2 1/4
Startups
Valuation of Unicorns as a share of total
1/2 1/4
stock market valuation
INNOVATE Consumer IOT Revenues in million USD 1/4 1/8
Consumer IoT revenues (billions of USD
1/4 1/8
PPP$ adjusted) per internet user
AR/VR Revenues in million USD 1/4 1/8
AR/ VR revenues (PPP$ adjusted) (in
1/4 1/8
Other Emerging billion) per smartphone user
Technology Metaverse Revenues in billion USD 1/4 1/8
Metaverse revenue (PPP$ adjusted) per
1/4 1/8
smartphone user
DeFi Revenue in million USD 1/4 1/8
DeFi revenue (millions of USD PPP$
1/4 1/8
adjusted) per internet user
Cybersecurity spending in million USD 2/5 2/10
Cybersecurity spending in Million USD
2/5 2/10
(PPP$) as a % of internet users
Geography Wise Cybersecurity Patent
1/5 1/10
Count (Cumulative from 2018 to 2022)
Preparedness
% of total patents that are cybersecurity
1/5 1/10
related (2018-2022)
Number of Secure servers 2/5 2/10
PROTECT Number of Secure servers per million
2/5 2/10
population
Ransomware attacks 30 day average 1/2 1/4
Ransomware attacks detected per month
1/2 1/4
as a percent of internet users
Risk of
Total number of email leaks 1/2 1/4
Attack
Total number of email leaks (Quarterly
average) (2021 Q3- 2024 Q3) as a percent 1/2 1/4
of internet users

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09. Annexures

CHIPS CHIPS CHIPS

Pillar Sub -Pillar Indicator
Economy User Combined
Percent of respondents who are
1/2 1/2 1/2
concerned about online privacy
PROTECT Trust Percent of respondents who say they trust
1/2 1/2 1/2
the internet
Green data centres in million USD 1/5 4/40
Green data centres market size as a
1/5 4/40
percent of data centre revenues
Environment, Health, and Safety (EHS)
software including carbon footprint 1/5 3/40
management
Market Size of Energy Management
Software and Environment, Health, and
Safety (EHS) software including carbon 1/5 6/40
footprint management as a percent of total
Commercialisation software revenue
of Green Tech Energy Management Software 1/5 3/40
R&D
Share of digital startups in total energy
1/5 4/40
startups
Sustainable Electronics (Smartphones and
1/5 4/40
SUSTAINABILITY PCs)
Market revenue from sustainable
electronics as share of revenue from total 1/5 4/40
electronics
E-waste generation in kilos 1/5 4/40
E-waste generated (kg per internet user) 1/5 4/40
Patents filed (2000-2021) in Smart Grids 1/2 1/4
Patents filed (2000-2023) in Smart Grids as
1/2 1/4
a percent of total patents filed
Patents filed (2000-2021) in Information/
R&D Communication Technologies for 1/2 1/4
Electromobility
Patents filed (2000-2021) in Information/
Communication Technologies for 1/2 1/4
Electromobility

Table A4 Weighting for G32 CHIPS Economy, User and Combined

Weight for
Pillar Sub -Pillar Indicator CHIPS CHIPS CHIPS
Economy User Combined
Price of mobile data and voice basket
2/7 2/14
(HC) PPP
Price of mobile data and voice basket
2/7 2/14
(HC) (% of GNI PC)
CONNECT Affordability
Price of mobile data and voice basket
2/7 2/14
(LC) PPP
Price of mobile data and voice basket
2/7 2/14
(LC) (% of GNI PC)

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 09. Annexures

Weight for
Pillar Sub -Pillar Indicator CHIPS CHIPS CHIPS
Economy User Combined
Price of cheapest smartphone in USD
1/7 1/14
PPP
Price of cheapest smartphone (% of
1/7 1/14
GNI per capita)
Affordability
Price of fixed broadband internet, USD
2/7 2/14
PPP
Price of fixed broadband internet (%
2/7 2/14
of GNI)
Median Mobile Download Speeds
1/2 1/2 1/2
(Mbps)
Quality
Median Fixed Broadband Download
1/2 1/2 1/2
Speeds (Mbps)
Number of internet users 1/5 1/10
Percent of population using the
1/5 1/10
internet
CONNECT
Mobile cellular subscriptions 1/5 1/10
Mobile Cellular Subscriptions per 100
1/5 1/10
population
Population covered by LTE 1/5 1/10
Percent of Population covered by LTE 1/5 1/10
Access Number of smartphone users 1/5 1/10
Percent of population using
1/5 1/10
smartphones users
Gender gap in number of women
needing to connect to reach parity 1/5 1/10
with male users
Gender gap in percentage population
using the internet (percent -
1/5 1/10
percentage point divided by
population percentage)
Number (16-64 years) using social
1/6 1/12
media for work related activities
Percent of internet users (16-64 years)
using social media for work related 1/6 1/12
activities
Number of users of digital food
1/6 1/12
delivery platforms
Percent of internet users using digital
1/6 1/12
App food delivery platforms
HARNESS
economy Number of users of digital health
1/6 1/12
applications
Percent of internet users using digital
1/6 1/12
health applications
E-commerce users 1/6 1/12
Percent of internet users using
1/6 1/12
e-commerce users
Number of mobile of app downloads
1/6 1/12
(in billions)

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09. Annexures

Weight for
Pillar Sub -Pillar Indicator CHIPS CHIPS CHIPS
Economy User Combined
Number of mobile app downloads per
1/6 1/12
internet user
App
Video On Demand Users 1/6 1/12
economy
Percent of internet users using video
1/6 1/12
on demand users
Total monthly fixed broadband
1/2 1/4
internet traffic (GB)
Monthly Fixed-broadband Internet
1/2 1/4
traffic (GBs) per subscriber
Data Intensity
Total monthly mobile broadband
1/2 1/4
internet traffic (GB)
Monthly mobile-broadband Internet
1/2 1/4
traffic (GBs) per subscriber
Value of digital transactions in billion
1/4 2/16
dollars
Value of digital payment transactions
(USD PPP exchange rate) per internet 1/4 2/16
user
Number of people who made or
1/8 1/16
received a digital payment
Percent of internet users who made or
1/8 1/16
received a digital payment
HARNESS Number of people who received
private sector wages: into an account 1/8 1/16
(age 15+)
Percent of population (age 15 +) who
received private sector wages into an 1/8 1/16
account
Neo banking Transaction value
1/4 2/16
Fintech (absolute)
Value of neo banking transactions
(USD PPP exchange rate adjusted) per 1/4 2/16
internet user
Number of people who received
public sector wages: into an account 1/8 1/16
(age 15+)
Received public sector wages: into
an account (% of public sector wage 1/8 1/16
recipients, age 15+)
Individuals who received government
transfer or pension into an account 1/8 1/16
(age 15 +)
Received government transfer
or pension: into an account (% of
1/8 1/16
government transfer or pension
recipients, age 15+)

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 09. Annexures

Weight for
Pillar Sub -Pillar Indicator CHIPS CHIPS CHIPS
Economy User Combined
ICT service exports (BOP current $) in
1/2 1/4
million $
ICT service exports (% of service
1/2 1/4
exports, BoP)
HARNESS Real Economy
Market Valuation of listed IT and
1/2 1/4
Communication Services Companies
Share of IT stocks in total market
1/2 1/4
valuation
Research in AI (Indexed Score) 1/3 1/3 2/6
Infrastructure for AI (Indexed Score) 1/3 1/3 2/6
AI VC Investments in AI in million USD 1/3 1/6
Venture Capital Investments in AI
1/3 1/6
(millions USD) as a % of GFCF
Number of start -ups 1/2 1/4
Number of Startups per listed
1/2 1/4
Investments and company
Startups Total Unicorn Valuation in billion USD 1/2 1/4
Valuation of Unicorns as a share of
1/2 1/4
total stock market valuation
INNOVATE Consumer IoT Revenues in MN USD 1/4 1/8
Consumer IoT revenues (billions of
1/4 1/8
USD PPP$ adjusted) per internet user
AR/VR Revenues in million USD 1/4 1/8
AR/ VR revenues (PPP$ adjusted) (in
1/4 1/8
Other Emerging billion) per smartphone user
Technology Metaverse Revenues in billion USD 1/4 1/8
Metaverse revenue (PPP$ adjusted)
1/4 1/8
per smartphone user
DeFi Revenue in million USD 1/4 1/8
DeFi revenue (millions of USD PPP$
1/4 1/8
adjusted) per internet user
Cybersecurity Revenue in billion USD 1/2 1/4
Cybersecurity revenue in million USD
1/2 1/4
(PPP$) as a % of internet users
Preparedness
Number of Secure servers 1/2 1/4
Number of Secure servers per million
1/2 1/4
population
PROTECT Ransomware attacks 30 day average 1/2 1/4
Ransomware attacks detected per
1/2 1/4
month as a % of internet users
Risk of Attack Total number of email leaks 1/2 1/4
Total number of email leaks (Quarterly
average) (2021 Q3- 2024 Q3) as a 1/2 1/4
percent of internet users

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09. Annexures

Weight for
Pillar Sub -Pillar Indicator CHIPS CHIPS CHIPS
Economy User Combined
Green data centres in million USD 1/5 4/40
Green data centres market size as a
1/5 4/40
percent of data centre revenues
Market revenue of Environment,
Health, and Safety (EHS) software
1/5 3/40
including carbon footprint
management
Market revenue of Energy
1/5 3/40
Management Software
Market Revenue of Energy
Management Software and
Environment, Health, and Safety (EHS)
Commercialization 1/5 6/40
software including carbon footprint
of Green Tech
management as a % of total software
revenue
Share of digital startups in total energy
1/5 4/40
startups
SUSTAINABILITY Market revenue of Sustainable
1/5 4/40
Electronics (Smartphones and PCs)
Market revenue from sustainable
electronics as share of revenue from 1/5 4/40
total electronics
E-waste generation in kilos 1/5 4/40
E-waste generated (kg per internet
1/5 4/40
user)
Patents filed (2000-2021) in Smart
1/2 1/4
Grids
Patents filed (2000-2023) in Smart
1/2 1/4
Grids as a percent of total patents filed
Patents filed (2000-2021) in
R&D
Information/Communication 1/2 1/4
Technologies for Electromobility
Patents filed (2000-2021) in
Information/Communication 1/2 1/4
Technologies for Electromobility

Annexure 3: Indicators for which data is repeated from SIDE 2024

Some indicators in this year index have been indicators have been repeated are as follows:
repeated from last year’s index because an update
of these indicators is not available but form a crucial CONNECT:
indicator that in measurement of the overall index 1) Price of Cheapest smartphone (2022 or latest
and the pillar scores. Some of these for which available)– Measures how devices in each

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 09. Annexures

country are affordable. In this year’s iteration, the 3) Number of people who received public sector
only difference is the conversion to PPP$ wages: into an account (age 15+)
4) Individuals who received government transfer or
HARNESS: pension into an account (age 15 +)
In the harness pillar, 4 indicators have been
repeated from Findex 2021. The same as been used PROTECT:
in the relative index and has been normalised with The following two indicators have been repeated
population as the base. for the G20 index:
1) Number of people who made or received a 1) Geography Wise Cybersecurity Patent Count
digital payment (Cumulative from 2018 to 2022)
2) Number of people who received private sector 2) Percent of total patents that are cybersecurity
wages: into an account (age 15+) related (2018-2022)

Annexure 4: Missing Data in G32 countries

COUNTRY CHIPS Economy CHIPS Economy CHIPS User 2024 CHIPS User 2025
2024 2025
Argentina Fixed broadband Fixed broadband • Fixed broadband • Fixed broadband internet traffic
internet traffic internet traffic internet traffic • Digital energy startups
• Digital energy
startups
Belgium Smartphone Users • Smartphone Users
• AR/VR
• Metaverse
• Smart grid patents
• ICT in electromobility patents
Chile • Smart grid patents
• ICT in electromobility patent
China • Public sector • Public sector wages • Public sector wages • Public sector wages
wages • DeFi revenue • DeFi revenue • VC investments in AI
• DeFi revenue • DeFi revenue
Czechia VC investments in AI • VC investments in AI
• Digital energy startups
• Smart grid patents
• ICT in electromobility patents
Egypt • VC investments in AI
• Digital Energy Startups
• Smart grid patents
• ICT in electromobility patents
Finland Internet users using • Social Media for work
social media for work • Startups
related activities
France Fixed broadband Fixed broadband Fixed broadband Fixed broadband internet traffic
internet traffic internet traffic internet traffic
Ireland Startups

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09. Annexures

COUNTRY CHIPS Economy CHIPS Economy CHIPS User 2024 CHIPS User 2025
2024 2025
Mexico • Smart grid patents • Smart grid patents
• ICT in • ICT in electromobility patents
electromobility
patents
Netherlands • Fixed broadband • Fixed broadband internet traffic
internet traffic • Email Leaks
• Email Leaks • Digital Energy Startups
Nigeria • Digital government • Digital government pension
pension • Smart grid patents
• Smart grid patents • ICT in electromobility patents
• ICT in electromobility
patents
Russia • Startups Unicorn Valuation • Startups; • Unicorn Valuation
• Unicorn • Unicorn Valuation • Digital energy startups
Valuation
Saudi Arabia Unicorn Valuation Unicorn Valuation Unicorn Valuation Unicorn Valuation
Singapore • Mobile app • Mobile app downloads
downloads • Fixed broadband internet traffic
• Fixed Internet
broadband traffic
South Africa Digital energy Digital Gender gap
startups
South Korea Digital energy
startups
Thailand • Smart grid patents • Digital Energy startups
• ICT in electromobility • Smart grid patents
patent • ICT in electromobility patents
Turkey • Smart grid patents • Smart grid patents
• ICT in • ICT in electromobility patents
electromobility
patents
United • Smart grid patents • Smart grid patents
Kingdom • ICT in • ICT in electromobility patents
electromobility
patents
United Fixed broadband • Fixed broadband Fixed broadband • Fixed broadband internet traffic
States internet traffic internet traffic internet traffic • Ransomware attacks
• Ransomware attacks

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 09. Annexures

Annexure 5: Digital Adoption by India’s Youth

The ASER (Annual Status of Education Report), having potential access to a smartphone at home,
a representative survey of rural districts of India, their ability to actually use it and have time with it
included a section on digital literacy in its recent is lower.
2024 survey. It found that teenagers’ access to
smartphones in rural areas is relatively high. Around The survey also looks at what rural teenagers use
89% of rural children aged 14-16 had access to a smartphones for. Overall use of smartphone for
smartphone at home, with around 82% knowing education activities is relatively low, with only 57%
how to use it. There are, however, gender gaps girls’ of rural children aged 14-16 doing so, compared
and boys’ access and use of smartphones, and their to 76% who use it for social media. Interestingly,
knowledge of safety features (see Figures below). amongst children who know how to use a
The gender gap in access to smartphones is lower smartphone, there is almost parity between boys
than in ability to use it. Although the gender gap in and girls in its use for education related activities.
access to a smartphone at home is relatively low, There is however, a concerning gender gap in basic
girls are less likely to be able to bring it with them for abilities for online safety such as knowing how to
an activity during the day. So, for some girls, despite change a password.

Digital adoption among rural youth aged (14-16)

100 85
80 78.8
90 90.2
88.1 75
85.5 73.4
80 79.4 70
65.4
65 65.2
70 70.2
60 60.2
58.7
60 62.2 55 57.2 56.8
50.2
50
50 50.1
45
40 40
Boys Girls Boys Girls

Have a smartphone at home Know how to block/ Use Social media

Can use a smartphone report a profile Know how to change
Could bring a smartphone Use it for education a password
activities Know how to make
profile private

Source: ASER 2024 survey

97
IPCIDE
Indian Council for Research on International Economic Relations (ICRIER)

Plot No. 16-17, Pushp Vihar, Institutional Area, Sector 6, New Delhi-110017
O: +91 11 43112400 / 24645218 F: +91 11 24620180 | E: [email protected]
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