Net economy growing in India, but regulation may be roadblock: 'Economist' study

New Delhi, July 15 2013: India’s Internet Economy may hit $ 100 billion by 2015, finds a study conducted by The Economist Intelligence Unit and sponsored by the Asian Internet Coalition. 

Digital & mobile advertising is seen to be the key driver... but the regulatory environment is said to be a key impediment to growth
At present, advertising revenue in India is at 7%. But, of the US$ 410m being spent online, 60% goes to Google and Facebook, with only the remaining 40% going to other online players.

While online advertising in Asia is forecast to grow at a modest pace (from 24% of worldwide online advertising in 2010 to 26% by 2015) the mobile advertising market is really taking off. By 2015 Asia is expected to account for one-third of the mobile advertising market globally.

India’s online payment and credit card penetration is very low--2% compared to South Korea, Taiwan and Singapore.

The report,“Good to Grow: The Environment of Asia’s Internet Business” released  in India by  the Internet and Mobile  Association of India  says: “Asia is still finding its way with respect to governance and regulation of the Internet. The one area where ample regulation is in place is around liability for carrying content that either contravenes laws or is otherwise frowned upon. These often poorly worded or confusingly interpreted pieces of legislation create uncertainty for business owners, as well as high administrative costs in order to put safeguards in place. India, Thailand and Malaysia stand out as places where censorship is on the rise.”

Speaking at the launch of the report, Laurel West of Economist Intelligence Unit said, “India’s regulatory environment has considerable room for improvement. While the Ministry of Communications and Information Technology is responsible for the frequent issue of laws relating to Internet governance, there is no specific regulatory body for content and platform creators. Some, particularly smaller operators, take this as a good thing, since it means fewer barriers to entry, particularly compared with manufacturing and other over-regulated industries. But the downside is that there is no central avenue for communication with businesses that will be affected by changes in the law”.

The Asia Internet Coalition is an industry association formed by eBay, Facebook, Google, Salesforce and Yahoo! Incorporated to promote understanding and resolution of Internet policy issues in Asia Pacific.
The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services.