India’s digital transformation is advancing rapidly, but its spread across states remains uneven, according to a new report, “State of India’s Digital Economy,” by the Delhi-based Indian Council for Research on International Economic Relations (ICRIER) in collaboration with the Prosus Center for Internet and Digital Economy (IPCIDE).
Using the CHIPS framework, which includes five pillars: Connect, Leverage, Innovate, Protect and Sustain, the report reveals clear disparities between India’s states.
It classifies Indian states into four groups based on digitization levels: advanced digitizers (CHIPS score above 48), assured digitizers (41-44), rising digitizers (32-38), and aspirational digitizers (25-29).
Delhi, Kerala, Karnataka, Maharashtra and Haryana have emerged as the most digitally advanced states of the country, falling under the ‘advanced digitiser’ category. Unsurprisingly, these states are home to the country’s biggest technology hubs, including Bengaluru, Mumbai, Pune, Gurugram and Kochi.
Overall, the southern states, along with Delhi, Haryana, Punjab and Gujarat, lead India’s digital charge, having either achieved or come close to ‘advanced’ status with ‘guaranteed digitizers’ status.
Connectivity based on smartphones and internet access remains the basis digitization. While internet access continues to show large gaps between Indian states, it is encouraging that these gaps are beginning to close.
Internet usage averaged 63% nationally in 2024, with 11 states exceeding this benchmark. More importantly, the sharpest gains between 2022 and 2024 came from states in the lower categories – “ascending” and “aspirational” – of digitization. These states included Uttarakhand, Madhya Pradesh, Himachal Pradesh, Jammu and Kashmir, Assam, Jharkhand and Bihar. While the absolute gaps remain significant, these states are catching up.
Beyond just access, India’s digital story is increasingly defined by usage patterns. Digital Public Infrastructure (DPI) systems such as Aadhaar and a unified payment interface (UPI), now match private platforms in terms of reach among connected users, a significant shift from the earlier years when private apps dominated.
Aadhaar enjoys near-universal coverage, while UPI usage rivals popular platforms such as streaming services and social media. However, this success is not uniform: other public platforms such as e-NAM and e-Sanjeevani continue to see limited adoption, highlighting uneven outcomes across the public digital ecosystem.
However, India’s digital progress remains vulnerable in terms of protection. The report emphasizes that even high digitization will not protect states from growing cyber fraud and crime. Average fraud losses per incident remain elevated across all groups, including the most developed nations. In particular, the states offering the strongest overall protection against digital threats – Assam, Rajasthan, Punjab, Madhya Pradesh and Bihar – are not among the most digitally advanced.
The report’s findings suggest that the next phase of India’s digitization will depend less on building new digital pathways and more on strengthening access, adoption and protection. Without closing these gaps, rapid digital expansion risks being uneven and uncertain.
