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Rural markets drive India’s Internet usage growth: Survey

According to the survey, there are currently 692 million active internet users in India, with rural India continuing to lead the way in terms of growth
Rural markets drive India’s Internet usage growth: Survey
Rural markets drive India’s Internet usage growth: Survey (Representational image: Shutterstock)

A recently released, IAMAI-KANTAR report ‘Internet in India’ shows a tremendous increase in Internet users in rural India. According to the survey, there are currently 692 million active internet users in India, with rural India continuing to lead the way in terms of growth (351 million users with 37 per cent penetration), as urban India appears to have reached a plateau (341 million users with 69 per cent penetration). The report projects that by 2025, India would have 900 million internet users, with rural growth driving this increase. Among the states, Goa and Bihar have the highest and lowest internet usage penetration rates, respectively.

Base: ICUBE 2021, All India population 1454 million, urban India 496 Million, rural India 958 million, (Numbers in bracket indicate internet penetration)
Base: ICUBE 2021, All India population 1454 million, urban India 496 Million, rural India 958 million, (Numbers in bracket indicate internet penetration). Source: Internet in India 2021, IAMAI- KANTAR

More significantly for Indian internet businesses, 346 million Indians engage in genuine online transactions like e-commerce and digital payments, which is higher than the estimated 331 million US population. The country recorded a 51 per cent surge in digital transactions during Covid-19 pandemic, from 230 million in 2019.

In terms of gender distribution, male internet users outnumber female users in India, with about the same gender ratios across urban and rural users.

In terms of user behaviour, the top three online activities in India are social networking, communication and entertainment. While text and email are the most common forms of communication, the survey finds that voice and vernacular language usage will be the primary factors in growth in the future. Two out of every five rural internet users have engaged in speech-based activities on their phones. While OTT service penetration in rural India is on par with urban India, other digital service penetration—including online gaming, digital commerce, and digital payments—remains biassed in favour of urban users. This illustrates the rural population’s significant untapped potential for the expansion of such services.

Base: ICUBE 2021, Active Internet users, 692 million, urban India 341 million, rural India 351 million (Number in bracket indicate penetration). Source: Internet in India 2021, IAMAI- KANTAR
Base: ICUBE 2021, Active Internet users, 692 million, urban India 341 million, rural India 351 million (Number in bracket indicate penetration). Source: Internet in India 2021, IAMAI- KANTAR

Currently, 762 million Indians, 63 per cent of whom live in rural areas, have not yet received internet services. The key obstacle, coupled with ignorance, is still ‘difficulty to understand the Internet’ persisting, especially in rural India.

Base: ICUBE 2021, Non-active Internet users, All India 762 million, urban India 155 million, rural India 607 million. Source: Internet in India 2021, IAMAI- KANTAR
Base: ICUBE 2021, Non-active Internet users, All India 762 million, urban India 155 million, rural India 607 million. Source: Internet in India 2021, IAMAI- KANTAR

Research Methodology

The ‘Internet in India’ report, based on the ICUBE 2021 study, is an annual report that is the oldest and most thorough study of internet usage in the nation. It covers around 77,000 households throughout India’s states and union territories (apart from Lakshadweep). Internet and Mobile Association of India (IAMAI) and KANTAR, a global leading marketing and data analytics organisation, worked together for conducting the survey.

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The Changing Face of Rural India