Rural areas drive Internet usage growth in India

The number of Internet users residing in rural India has surpassed urban centres for the first time in 2021, Internet and Mobile Association of India (IAMAI) and Kantar revealed in their new report ‘Internet in India’ published on Thursday.  

The report said that India has 692 million active Internet users, which is expected to grow to 900 million by 2025. Rural India is expected to drive this growth, the report added. 

It shows that rural India accounted for 351 million Internet users in 2021, up from 299 million in the previous year, while urban India had 341 million Internet users last year, up from 323 million in 2020. 

Though rural India has more Internet users, its Internet penetration is still 37% given India's larger agrarian base as compared to urban areas where the penetration is might higher at 69%. Goa was identified as the state with the highest Internet penetration while Bihar has the lowest, according to the report. 

In terms of online activities, the report claims that around 346 million Indians are spending time on e-commerce sites and making digital payments. However, entertainment, communications, and social media were recognised as the top three online activities for Internet users in India. 

The report shows that OTT penetration in rural areas is the same as in urban India. However, the gap between the two is still higher in online gaming, digital commerce, and payments, indicating room for growth in rural India. 

Further, the report claims that around 762 million Indians have still not started using the Internet, out of which 63% reside in rural areas. ‘Difficulty to understand and use the Internet was cited as the top reason for not using it. In urban areas, 155 million people are still not using the Internet. 

The ‘Internet in India’ report is based on the ICUBE 2021 study, which covers over 77,000 households across all states and UTIs.