Notes on India, BRICS and Digital Economy

Digital economy

The digital economy is shaping the world today. From becoming a smooth transaction platform to modern-day swag, it is leaving its footprints all over the globe. The digital economy is different than the traditional economy and has become a priority area for many countries. India, for example, came with “Digital India” in 2015. The official website states that “Digital India is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy.”

The digital economy is characterized by numerous phenomena in the global business environment, including, but not limited to globalization, digitalization, and removal of the middlemen. The digitalization of market and economic activities has internationalized the outreach of the economy expanding market reach, scope, and speed. It has removed the need for human contact, by creating virtual objects that are easily accessible. While living in the suburbs of Moscow, I can order and read an ebook of J.M. Coetzee or Mahaveer Prasad Dwivedi just by pressing some buttons on my keyboard.

The application and usage of the digital economy are driven by information and knowledge sources. The widespread penetration of the internet facilitates the process of exchange of things and currency. It is predicted that by 2021, there will be over 600 million internet users in India. Only 17 per cent of the Indian population could access the internet in 2015. India currently has over 560 million internet users, making it the second largest online market in the world, after China. In 2016, India’s digital buyer penetration was 43.8%, with annual retail e-commerce sales of USD 20 billion.

Building confidence and security is ecommerce transactions is one of the most important issues. Removal of hindrances from online transactions, a proper regulatory framework that suits the current needs, growth and increased usage of the internet, significant coverage of high speed internet, and an efficient e-governance structure are some other factors that can create and sustain suitable environment for the growth of digital economy.  In developing countries there are several challenges in front of digital economy such as small number of trained workers, growing social disparity, lack of internet/computer literacy, and the question of access and usage of the internet. The digital economy also creates new customers, and requires new business models. Since, the origin and development of the digital economy are associated with its borderless base, finding a stringent legal framework is another important factor.

BRICS was formed with the idea of providing a common platform to five emerging economies. As of 2018, these five nations had a combined nominal GDP of US$18.6 trillion, about 23.2% of the gross world product, a combined GDP (PPP) of around US$40.55 trillion (32% of World’s GDP PPP), and an estimated US$4.46 trillion in combined foreign reserves. Two renowned professors of The People’s Friendship University of Russia (RUDN) have presented a paper on the digital economy in BRICS countries. Main points from the paper are as follows:

I. Lazanyuk, S. Revinova. (2019). Digital economy in the BRICS countries: myth or reality? Proceedings of the International Scientific and Practical Conference on Digital Economy (ISCDE 2019). Retrieved from


It has been shown that digitalization has a positive effect on per capita GDP growth only after reaching the distribution and use of ICT at a certain critical point.

An analysis of the components of the telecommunications infrastructure index showed that Russia, Brazil are close to their saturation point, and India, South Africa, and China have very good sources of growth. The e-government development index and the telecommunications infrastructure index showed a high degree of correlation. Used summation method showed that now in Russia a degree of readiness for the formation of the digital economy has reached almost the maximum value, while those of the BRICS countries like China, India and South Africa are still in their infancy, but there are significant advantages to accelerate the digitalization process. For the digital economy to become a reality for all the BRICS countries, serious government measures and large investments are required, both in the development of infrastructure for access to the Internet and in investment in human capital.

The development of digitalization leads to increased efficiency of the economy and improving people’s quality of life. Conducted by Economist Intelligence Unit structural analysis confirms the view that in the developed countries there is a close correlation between Information and communications Technology( ICT) and economic growth, and that ICT provides growth of GDP per capita.

Studies in the US and Europe show that investing in ICT helps to achieve high growth in every sector of the economy (Remache A. & Belarbi A., 2019).

Research shows that ICT contributes to sustainable development through more efficient management systems, to promote changes in behavior and reduced energy consumption (Bull, 2015).


Compared to developed countries, in which the process of creating Industry 4.0 was launched earlier and aimed at achieving marketing and social results, BRICS ountries face institutional and financial barriers. (Bogoviz et al., 2019).

Enhancing the role of the BRICS countries in today’s global economy is largely dependent on the degree of advancement of their economic integration in several areas, including in science and technology and the use of innovative products (Gusarova, 2015).

To analyze digital development, we used data on the BRICS countries from 2010 to 2018. Socio-economic indicators are taken from the World Bank databases.

Currently one of the major problems is the slowdown in the global economy. According to the World Bank, the average growth rate of world GDP from 2010 to 2018 amounted to 2.5%, and from 1960 to 1970 it was at 5.3%. The average increase in world trade also decreased, for example, for the period 1980 – 2011 amounted to 7%, but in 2016 and 2017 it decreased to 1.8% and 4.7%, respectively. [WTO trade forecasts].

Thus, the United al States for several years a leader in the world in terms of GDP, al but it took the 23rd place among countries with developed economies, by the index of inclusive Leaders regard the formation of a national digital economy as an opportunity that will allow countries to go to high-quality economic growth to solve the technological, infrastructural and social problems in the national economy. That is why national e governments initiated the “digitalization” of their economies as a strategic task, formulating their national programs: “Digital st India” as part of the “Make in India” strategy in India, “Digital China” as part of the “Made in China, 2025” strategy in China, the Digital Economy of the Russian Federation, approved in Russia in 2017. In Brazil, in 2017, a working group was established to formulate the national digital development strategy “The Brazilian Digital Strategy”. In South Africa in

2013, the Electronic Communications Act: South Africa Connect: Creating opportunity, ensuring inclusion South Africa strategy was adopted Broadband Policy.


E-Government Development Index (EGDI) demonstrates the degree of readiness of countries for the implementation and use of e-government services. Russia is steadily leading in the ranking by the value of the e-Government Development Index among the BRICS countries. Other member countries occupy the following positions: Brazil – 44 th place, China – 65th, South Africa 68th, India 96th.

Russia’s place in the ranking can be a dynamic educat distribution of fixed broadband Internet (up to now it has evolved considerably weaker than the cell), the creation of conditions for effective interaction between citizens and the state, as well as providing the necessary level of promotion of electronic services. As for other members of the BRICS, it can be stated that in China and India the limit indicators: the spread of mobile communications, the number of Internet users, the spread of mobile broadband Internet access, as well as the adult literacy rate, and coverage of the population at primary and other levels, have not yet been reached and it can be regarded as a driver of growth of the digital economy of these countries.


However, an analysis of the data shows that, to date, the ICT index does not fully reflect the level of development of the country’s welfare. IT has a positive effect on the growth of GDP per capita is only after reaching a certain minimum threshold of ICT development. In other words, the distribution and use of ICT must reach a certain critical mass before they begin to have a significant positive impact on the economy.

Thus, we can say that the best infrastructure and human capital belong to Russia in the 2nd place of Brazil, followed by China, South Africa and India closes the rating.

The ICT index is not yet sufficiently informative to assess the level of welfare since it gives a significant positive impact on the economy with a time delay. But it can be used for a significant breakthrough, which is important for developing countries.

(Ashish Kumar Singh is a doctoral candidate at the National Research University Higher School of Economics, Moscow)




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