IoT adoption in India has exploded in the last three years, with enterprises spending billions of dollars in testing and deploying several IoT use cases.
India’s Internet of Things (IoT) investments are expected to reach $15 billion this year, up from $5 billion in 2019, according to a report by global management and strategy consulting firm Zinnov. The study highlights that India had 200–250 million connected devices by the end of 2019. This is projected to grow tenfold to touch 2 billion devices by 2021, mainly driven by the manufacturing, automotive and transportation, and energy and utilities sectors.
IoT adoption in India has exploded in the last three years, with enterprises spending billions of dollars in testing and deploying several IoT use cases. According to Zinnov, five key segments are contributing to the overall IoT market demand in India—large enterprises in which IoT adoption rate is around 35%; global capability centers that are rapidly testing, implementing, and scaling IoT technologies and use cases; small and medium businesses that are leveraging some form of advanced digital technology solutions for driving business operations, including artificial intelligence (AI), cloud, and IoT; the increasing connectivity and smartphone penetration across the country that are driving the adoption of IoT-based solutions in the consumer segment; and the Government, which is driving large-scale initiatives such as the Smart Cities project and the Digital India program.
India has huge potential for growth of the IoT market, according to Gaurav Kapoor, Regional Sales Manager India of Nordic Semiconductor. “Verticals such as banking, education, healthcare, manufacturing, retail, and railway have started moving their on-premise applications to cloud-based platforms to optimize reach and performance, as well as scalability and elasticity,” says Kapoor.
The demand from the consumer sector—especially with the growing middle class and burgeoning rural consumption—amid rising healthcare awareness due to the pandemic, is also one of the major drivers of growth for India’s IoT sector. On top of this, major e-commerce players are strengthening of logistic capability to meet the demand from the growing number of online purchasing.
The smart city vision is yet another factor that is expected to further fuel the growth of India’s IoT sector. In the Union Budget 2021, the India Government allocated funds worth INR6,450 crore ($891.27 million) for the country’s Smart Cities Mission, almost double that of the previous budget of INR3,400 crore ($469.82 million).
This support for the development of smart cities in the country—the key aspects of which include smart parking, intelligent transport system, tele-care, safety, smart grids, waste management, smart city maintenance, digital signage, and water management—could lead to a massive and quick expansion of the IoT industry. The launch of the “Digital India” program of the Government, which aims at ‘transforming India into digital empowered society and knowledge economy’, likewise will provide the required impetus for the development of the IoT sector in India.
“The pandemic accelerated the adoption of new digital technologies and created a hybrid work model in many companies. According to DPIIT [Department for Promotion of Industry and Internal Trade], the computer software and hardware sector attracted the highest FDI equity inflows—equivalent to $24.4 billion—and is nearly four-times higher when compared with the previous year,” says Kapoor.
Information and communication technology (ICT) hardware, in the context of the hardware industry, encompasses computers, storage, datacom, office automation hardware, and operating systems. It involves the design of the semiconductors, the design of products, the manufacturing of hardware, and the development of their operating systems. Emerging domains like AI and IoT are now the new driving forces for the growth of the ICT hardware segment. Another emerging domain in ICT hardware is the large-scale data centers, data analytics, and edge computing. This year has seen growing demand for ICT hardware arising out of work from home and the need to be connected remotely.