For India, digitization is a part, although a large part, of the country’s ambitious modernization program.
“India is building a digital country and I think that’s what is going to serve it well over the next decade,” wrote Ajay Krishnan, lead portfolio manager for the $425 million Wasatch Emerging Markets Select Fund, in a report released in May 2022. Investment analysts from Wasatch Global Investors, based in Salt Lake City, Utah, have been visiting India for more than 20 years and think it has already accomplished substantial digitization and is poised for more rapid growth.
“Investors under-appreciate India’s digitization push,” Krishnan says. Over the past five years, India’s government expanded broadband internet infrastructure and created a public digital-payments system so everyone has a bank account as well as a secure, cloud-based digital locker to store, share, and verify documents. Combine that push with a young, digitally savvy population, and India is starting a virtuous cycle that could last for years to come,” he wrote.
Wasatch wrote that India has been creating 30 kilometers of highways per day and expects to reach 40 km a day soon. The county is connecting 50 million people to electricity each year, greater than the population of Spain. “The country is also on track to build cutting-edge metro systems in all of its major cities. Moreover, India has set a target of constructing 220 new airports by 2025.”
In an important soft skill, India has the second largest number of English speakers in the world after the U.S., noting that English is the global language of business, Krishnan says. IBEF notes that India has the youngest population globally, with an average age of 29; more than 68% of Indians are below the age of 40, out of which 70% of users are already on the internet. India’s middle class is expected to comprise a billion people by 2030, 70% of India’s population. It is projected to surpass China in population in 2023.. Crucially, India will gain more than 110 million people of working age while China will lose several million and have a growing number of aging retirees. A United Nations model projects China’s population, 1.4 billion today, peaking in 2028, then shrinking to 700 million to 900 million by 2100.
Digitization in India builds on the foundation of Aadhaar, a biometric identity program that has enrolled more than one billion people (99% of the country’s population as of June 2021 — IBEF), providing each individual with unique, verifiable identity credentials that are crucial for digital interactions with government, marketplaces, P2P payments and financial services.