Context: The third edition of the State of India’s Digital Economy (SIDE) 2025 report was released recently. It emphasises India’s rising stature in global digitalisation but also highlights significant gaps that need to be addressed to compete on the global AI stage.
Relevance of the Topic: Prelims: Key findings of State of India’s Digital Economy (SIDE) 2025 report.
State of India’s Digital Economy (SIDE) Report
- Published by: Dutch investment firm Prosus and think tank Indian Council for Research on International Economic Relations (ICRIER).
- The SIDE 2025 report uses the Connect-Harness-Innovate-Protect-Sustain(CHIPS) framework to measure the scale and depth of digitalisation in India and other countries.
- This framework emphasises not only the technological infrastructure but also the societal, economic, and policy-driven aspects of digital transformation.
Major Highlights of the Report
Global findings:
- The global AI race is currently led by the US and China, with South Korea, Singapore, and the Netherlands being front-runners.
India-specific Findings:
- Among 32 countries (comprising 17 developed and 15 developing nations), India has scored:
- 11th position in AI Research
- 16th position in AI Infrastructure
- India is the world's third-largest digitised nation, following the United States and China.
- When combining both country-level and user-level digitalisation scores, India’s ranking drops to 8th in the G32 group.
- This reflects that though India has a large number of users and high levels of digital engagement, the average user remains modestly digitalised.
- While digital services are increasingly accessible, their usage and impact are not yet widespread, across all segments of the population.
India has considerable potential to challenge the current dominance of the US and China in the AI race. With enhanced investment in AI research and infrastructure, coupled with targeted policies, India could significantly bolster its standing and build the scale necessary to compete with AI giants.