Internet Connectivity in India – Significance & Challenges – Explained Pointwise

According to the Minster of Communication, Jyotiraditya Scindia, India has become the 2nd largest telecom market in the world, with number of internet users increased from 250 million to 974 million in last 11 years & expected to hit 1 billion users in few months.
In this article, we will try to analyze the significance of increased internet connectivity in India, what are some of the challenges associated, various government initiatives & what can be the way forward.

Facts related to internet connectivity:

• India has an approximately 974 million internet users, representing a penetration rate of ~56% of the total population.
• Rural India is now the primary driver of internet growth. In 2024, rural internet users (488 million) surpassed urban users (397 million) for the fourth consecutive year.
• The average data cost per GB has seen a massive reduction, from ₹287 in March 2014 to ₹9 in March 2024, making internet access highly affordable.
• Calling prices have gone from 50 paise to 0.003 paise a minute.
• Average data consumption per user has surged from 0.26 GB in March 2014 to 20.27 GB in March 2024. 
• India has significantly improved its global ranking in average internet download speed (Ookla speed test), moving from 130th position to 16th position in March 2024.

What is the significance of internet connectivity in India?

1. Growth Driver: The internet is a key driver of India’s economic growth. The digital economy is projected to contribute nearly one-fifth of India’s GDP by 2029-30, outpacing traditional sectors like agriculture and manufacturing.

2. Job Creation: It fuels job creation directly (in IT, telecom, e-commerce, FinTech) and indirectly by enabling businesses to scale, innovate, and reach wider markets. The digital economy employed 14.67 million workers in 2022-23.

3. E-commerce and Online Businesses: The internet has revolutionized commerce, enabling millions of small and medium enterprises (SMEs) to access national and global markets, driving growth in online shopping, food delivery, and various service sectors.

4. Financial Inclusion: Initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY) coupled with internet connectivity have brought banking services to previously unbanked populations, enabling Direct Benefit Transfers (DBT) and reducing leakages.

5. Improved Service Delivery: Internet connectivity enables the online delivery of government services, making them more accessible, transparent, and efficient (e.g., birth/death certificates, land records, driving licenses, ration cards, tax filing).

6. Direct Benefit Transfer (DBT): A backbone of many welfare schemes, DBT relies heavily on internet connectivity to directly transfer subsidies and benefits to beneficiaries’ bank accounts, reducing leakages and ensuring timely delivery.

7. Online Learning: The internet has transformed education, providing access to online courses (e.g., SWAYAM, Coursera, Byju’s), virtual classrooms, and digital learning resources for students across all levels. This has been particularly crucial during the COVID-19 pandemic.

What are the challenges associated with internet connectivity in India?

1. Digital Divide (Rural vs. Urban Quality): While penetration is growing, a gap persists in the quality and reliability of internet services between urban centers and many rural areas.

2. Infrastructure Limitations: Despite efforts, significant infrastructure challenges remain in difficult terrains, remote locations, and sparsely populated areas, making deployment of traditional fiber optic cables costly and logistically challenging.

3. Affordability of Devices: While data is cheap, the cost of smartphones and other internet-enabled devices can still be a barrier for the poorest segments of the population.

4. Digital Literacy: Low digital literacy levels, particularly among older citizens and in remote areas, limit effective internet usage and the adoption of digital services.

5. Reliable Power Supply: Unreliable electricity in many rural areas affects the functioning of telecom towers and broadband infrastructure.

6. Cybersecurity Threats: The rapid increase in internet users and digital transactions brings a heightened risk of cyberattacks and data breaches.

7. Last-Mile Connectivity: Ensuring robust and reliable last-mile connectivity to individual homes and users, beyond the Gram Panchayat level, remains a challenge.

What are various government initiatives?

1. Digital India Program (Launched 2015): A flagship program aiming to transform India into a digitally empowered society and knowledge economy. Its pillars include Broadband Highways, Universal Mobile Connectivity, Public Internet Access Programs, and Digital Empowerment of Citizens.

2. BharatNet Project: It is one of the largest public sector investment project in connectivity to the grassroot level (rural connectivity project) globally, aiming to connect all 2.5 lakh Gram Panchayats (GPs) with optical fiber cable:

• As of March 2025, over 2.14 lakh GPs have been made service-ready.
• The Amended BharatNet Programme [Bharat Net-II] (approved August 2023) aims to enhance connectivity by providing optical fibre links in a ring topology to 2.64 lakhs GPs and extending services to non-GP villages on demand.

3. Pradhan Mantri Wi-Fi Access Network Interface (PM-WANI): Aims to boost public Wi-Fi hotspots, especially in rural and remote regions, through Public Data Offices (PDOs) to facilitate wider access.

4. National Broadband Mission (NBM): Launched in 2020, focuses on accelerating broadband infrastructure expansion. NBM 2.0 (starting April 2025) builds on this.

5. Digital Bharat Nidhi (DBN): Replaced the Universal Service Obligation Fund (USOF) to fund and bridge the digital divide in rural areas.

6. Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA): Aims to make rural citizens digitally literate, enabling them to access information and services online. Over 47.8 million rural citizens have been certified.

7. Gati Shakti Sanchar Portal: Streamlines Right of Way (RoW) permissions for OFC laying and telecom tower installation, accelerating infrastructure deployment. The Telecommunications Act, 2023, and RoW Rules 2024 further strengthened this.

8. PLI Scheme for Large-Scale Electronics Manufacturing (LSEM): Aimed at boosting mobile phone manufacturing and specified electronic components. This scheme has been highly successful in attracting major global players like Apple’s contract manufacturers (Foxconn, Wistron/ICT, Pegatron) and Samsung, alongside Indian companies. India has seen a massive increase in mobile phone production and has transformed from a net importer to a net exporter of mobile phones.

What can be the way forward?

1. Expedited BharatNet Implementation: Despite progress, the BharatNet project needs to be executed with greater urgency and efficiency. Focus on completing the ring topology to all Gram Panchayats (GPs) and extending fiber-to-the-home (FTTH) connections to individual households, not just GPs. The “Amended BharatNet Program” should be fully utilized.

2. Leveraging 5G for Last-Mile Connectivity: The rapid 5G rollout needs to be strategically leveraged, particularly through Fixed Wireless Access (FWA) services, to provide high-speed broadband in rural and remote areas where fiber deployment is challenging or uneconomical.

3. Diverse Technologies for Difficult Terrains: Explore and adopt a technology-agnostic approach. For challenging terrains (hilly regions, islands, forest areas), complement fiber and 5G with satellite broadband (LEO satellites), microwave, and other wireless technologies to ensure connectivity.

4. Affordable Smart Devices: Work with device manufacturers to encourage the production of affordable smartphones and other internet-enabled devices specifically for the rural market. PLI schemes for electronics can be extended to incentivize such manufacturing.

5. Content in Regional Languages: Promote the creation and availability of high-quality, relevant digital content in all major regional languages to encourage adoption and meaningful usage among non-English speaking populations.

6. Regulatory Predictability: Maintain a stable and predictable regulatory environment to attract long-term investments from both domestic and international players.

7. Data Security and Privacy: Implement robust data protection laws and cybersecurity measures to build trust among users, especially as more sensitive transactions move online. This is crucial for sustained internet adoption.

Conclusion:
Government’s multi-pronged approach—anchored by BharatNet, the National Broadband Mission, regulatory reforms, increased funding, and public-private partnerships—has significantly improved internet connectivity, especially in rural India. These efforts are central to bridging the digital divide, supporting inclusive growth, and positioning India as a global digital leader.