Digital Economy and Economic Growth Nexus in India: Evidence from Internet Penetration, Mobile Adoption, and Innovation Indicators

Abstract

Purpose: This study aims to examine the impact of digital innovation, internet penetration, and technological adoption on economic growth in India. It focuses on understanding how key digital economy indicators contribute to economic performance in a developing country context.

Methods: The study is based on secondary data collected from the World Bank World Development Indicators database for the period 1990–2023. A quantitative approach is adopted using descriptive statistics to understand data characteristics, correlation analysis to explore relationships among variables, and Ordinary Least Squares (OLS) regression to estimate the impact of digital variables such as internet usage, mobile subscriptions, and high-technology exports on GDP growth. Control variables including gross capital formation, trade openness, and inflation are also incorporated.

Results and Discussion: The results indicate that internet usage, mobile subscriptions, and high-technology exports have a positive and statistically significant impact on economic growth. The regression model explains approximately 74 percent of the variation in GDP growth, indicating a strong explanatory power. The findings suggest that digital connectivity and innovation enhance productivity, efficiency, and market expansion. However, inflation negatively affects growth, highlighting the importance of macroeconomic stability. The results are consistent with existing theoretical and empirical literature on digital economy and growth.

Conclusion: The study concludes that digital innovation and technological adoption are key drivers of economic growth in India. Strengthening digital infrastructure and promoting innovation can significantly enhance long-term economic performance.

Implications: The findings provide important policy insights for promoting digital inclusion, supporting innovation, and ensuring stable economic conditions to maximize the benefits of digital transformation.