India ranks 3rd in digitalisation but falls to 28th in per capita adoption

India’s sweeping scale, as one of the largest telecom and internet markets in the world, has made India the third largest digitalised country in the world – second only to the US and China. But in a paradoxical situation, the level of digitalisation seen at the level of an average Indian, has ranked the country at 28th out of 32.

The ICRIER-Prosus Centre for Internet and Digital Economy (IPCIDE) on Friday unveiled the third edition of the ‘State of India’s Digital Economy 2025 report. IPCIDE has developed the Connect-Harness-Innovate-Protect-Sustain (CHIPS) framework, for ranking 32 countries. The index combines scores for 32 countries on parameters such as connectivity, apps, fin tech, AI, cybersecurity, sustainability to arrive at the rankings.

As per the report, the overall ranking for India is 8th out of 32. As per the overall ranking, the US leads, with China a close 2nd. Singapore comes in at third, while the UK comes in 4th. Meanwhile, India beats developed countries like Japan and Australia and emerging economies like Mexico and Brazil.

The report has flagged low levels of digitalisation at the individual level. It flags how despite telecom penetration, 40% of the population doesn’t have access to the internet, and how 50% of the population doesn’t use smartphones.

The report also cites how India and Nigeria are the only two countries where mobile internet access is higher than fixed line access. The report raises concerns that fixed broadband infrastructure remains underdeveloped, limiting long-term digital resilience.

On AI, India ranks 11th in AI research and 16th on AI infrastructure among 32 countries. Here, the report highlights how the US and China enjoy a near duopoly. It cites how, for AI, US and China enjoy a decisive lead, account for 70 percent of the valuation of unicorns and 80 percent of venture capital (VC) investments in AI.

Speaking at the launch, India’s G20 Sherpa Amitabh Kant said, “The artificial intelligence race actually has just begun, and this race is wide open, and the race will not be won by those who built up very high-cost model but by those who democratise technology, use open source, and use cost competitive models.

“The government must strengthen digital infrastructure, businesses must continue to innovate, startups must continue to disrupt, and individuals must embrace more and more digital skills. The government, business, startups and citizens must work together to ensure an inclusive, sustainable and innovation-driven digital growth in India.”