Digital India: The Next Phase

Key Takeaways:

• India's digital story has changed. Growth is no longer driven by global IT exporters like Infosys and Wipro — it's being driven by domestic consumption, fintech, telecom, and e-commerce serving India's 958 million internet users.
• The MVIS Digital India Index is being repositioned to match. A new 50% domestic revenue threshold shifts sector weights dramatically — IT falls from 44% to 7%, while Communication Services, Financials, and Consumer Discretionary rise collectively to 79%.
• The investable universe is expanding fast. Major domestically focused listings in 2025 (Meesho, Groww) and anticipated 2026 IPOs (Jio Platforms, Flipkart, PhonePe) are bringing the depth of India's digital economy into public markets for the first time.

The MVIS Digital India Index — the underlying benchmark for the VanEck Digital India ETF (DGIN) — is updating its methodology to better reflect where growth is occurring in India today, shifting exposure away from global IT exporters and toward domestic consumption, financial services, and connectivity. This piece outlines the structural case for India's domestic digital economy and explains what is driving the index change.

From Export IT to Domestic Digital

India's listed equity market has long been dominated by large IT services companies that generate the majority of their revenue from clients outside the country. For years, these exporters shaped India's representation in global equity indices. That weighting, however, no longer reflects the composition of India's evolving domestic economy.

Rising smartphone penetration and household income growth are accelerating domestic digital activity across payments, e-commerce, online financial services, and telecom infrastructure. India's GDP has expanded from roughly $2 trillion in 2015 to approximately $3.9 trillion in 2025¹, with a growing share of economic activity flowing through domestic digital channels. The companies capturing that growth are increasingly different from those that have historically defined India's listed market.

Structural Drivers

Three structural factors underpin the expansion of India's domestic digital economy.

• Connectivity: India has approximately 958 million active internet users. A nationwide 5G rollout has extended high-speed access to urban and semi-urban markets, while data costs remain among the lowest globally.² Together, this infrastructure enables digital businesses to reach consumers across income levels and geographies at low marginal cost.
• Demographics: India's median age is 28, and its working-age population is large and expanding. Rising disposable incomes are translating into increased spending on digital services across finance, retail, entertainment, and consumer categories.
• Financialization of savings: Indian households have historically concentrated savings in bank deposits, real estate, and gold. Digital brokerage platforms and fintech networks are changing that, reducing the cost and complexity of accessing capital markets. The number of individual equity investors has grown from roughly 30 million in 2019 to more than 120 million by 2025³— a fourfold increase in six years. The result is a broader, deeper domestic investor base — one that provides structural support for India's expanding corporate sector.

Recent and Upcoming Listings

India's equity markets are beginning to reflect this structural shift. In 2025, four domestically focused digital companies — Meesho, Groww, Lenskart, and PhysicsWallah — listed on Indian exchanges, collectively representing more than $17 billion in estimated market capitalization at IPO. Among the companies expected to list in 2026, Reliance Jio Platforms and Flipkart represent two of the most anticipated listings in Indian market history. Collectively, this pipeline is expanding the investable universe of India's domestic digital economy and increasing the weight of domestically oriented businesses within listed equities.

Listed in 2025

Expected in 2026

Source: Company disclosures, press reports. 2026 market values are estimates. 2025 values reflect approximate IPO-period valuations. Expected listings are subject to market conditions and may not occur. Not intended as recommendations or investment advice.

Index Methodology Update

The MVIS Digital India Index is implementing a rules-based methodology change designed to realign the index with the current shape of India's digital economy. Under the updated rules, companies must generate more than 50% of their revenues from domestic sources to be eligible for inclusion. In practice, this reduces weight in IT services and consulting companies — primarily large-cap exporters whose revenues are tied to global IT spending — while increasing exposure to communication services, financials, and consumer discretionary companies that serve India's domestic market.

Concretely, the update reduces weight in names such as Infosys and Wipro, and increases weight in telecom infrastructure, digital payments, and consumer platform companies. The result is an index more directly aligned with the structural growth drivers outlined above — connectivity, rising incomes, and the financialization of household savings.

Sector Exposure: Before and After

Information Technology declines from 44% to 7%. Communication Services, Financials, and Consumer Discretionary collectively increase from approximately 44% to 79%.

Source: MarketVector Indices. Data as of 3/12/2026. Index composition is not directly representative of fund holdings. Not intended as recommendations or investment advice.

Thematic Exposure: Before and After

IT services and consulting declines from 40% to under 2%. E-commerce and telecommunications combined represent nearly 70% of the updated index.

Source: MarketVector Indices. Data as of 3/12/2026. Index composition is not directly representative of fund holdings. Not intended as recommendations or investment advice.

Positioning with DGIN

India's domestic digital economy is underpinned by structural rather than cyclical forces: a young and expanding consumer base, growing digital infrastructure, a deepening capital market, and an accelerating pipeline of domestically focused companies entering public markets. We believe the index methodology update repositions DGIN to capture that opportunity more directly.

DGIN offers a single-ticker vehicle for investors seeking exposure to India's domestic digital growth across connectivity, fintech, e-commerce, and consumer platforms.