NEW DELHI, 4th June 2025: India's top policy think tank, NITI Aayog, is pushing policymakers and business executives to embrace the CHIPS Framework, a new benchmarking model, as the nation works to solidify its position as a major global digital force.
Connect, Harness, Innovate, Protect, and Sustain is the acronym for the CHIPS Framework, which was unveiled in the State of India's Digital Economy (SIDE) 2023 report. The purpose of this model is to offer a multifaceted evaluation of a country's digital development. It is positioned as a strategic guide and measurement tool to help India navigate the next phase of its digital growth.
The call to action was emphasised during this week's high-level discussion on "Digital Economy for Viksit Bharat" hosted by NITI Aayog. The panel included Vice Chairman Suman Bery, CEO B.V.R. Subrahmanyam, Chief Executive Officer of NITI Aayog, and Dr Deepak Mishra, Director and CEO of ICRIER, who examined India's digital trajectory, drawing on data from the SIDE report and the India Digital Report 2025.
The report argues for a more nuanced understanding of digital ecosystems, stating that "digitalisation in the AI age cannot be measured with traditional metrics." Infrastructure, innovation capacity, cyber resilience, and sustainability considerations are all covered by the CHIPS Framework.
Third-Largest Digital Economy, But Gaps Remain
India has surpassed nations like South Korea, the United Kingdom, and Singapore to become the third-largest digital economy in the world, behind the United States and China. Thanks in large part to developments in technologies like the Internet of Things (IoT), metaverse applications, and augmented and virtual reality, the United States continues to dominate the digital landscape, with an innovation score that is almost twice as high as China's.
However, India's performance is mixed. The nation trails behind in important areas like AI adoption and consumer IoT deployment, despite having the third-highest number of unicorns and drawing substantial venture capital.
In the Innovation Pillar, India is ranked ninth in the world, but its lack of deep-tech research capabilities and inadequate infrastructure are limiting its progress. This is true even in the face of bold government-led programmes like the IndiaAI Mission, which aims to develop domestic AI models for competitiveness in the global market.
The 2025 report warns that "the finding that India lags in the AI sub-pillar is particularly concerning." It suggests that a more focused investment in AI talent and infrastructure could help reverse this trend.
Risks of Scale and Speed
India's enormous population, which offers both scale and purchasing power, contributes to the country's success in the digital sphere. However, the SIDE report notes that risks like cyber threats and environmental degradation are also brought about by the quick speed of digitalisation.
Regulatory protections and ecosystem resilience are becoming top priorities as the nation grows more digitally connected, from Aadhaar, the largest digital ID system in the world, to UPI's real-time payments network.
"It will take coordinated policy efforts from the government and Corporate India to safeguard India's digital ecosystem," Subrahmanyam stated at the NITI event.
From the Margins to the Mainstream
The Global South's emergence as a centre for digital innovation is a global trend that the SIDE report places India within. It cites instances of how emerging economies are outpacing more established stages of development, such as Nigeria's neobanks, Indonesia's digital wallets, and Brazil's Pix payments system.
The CHIPS Framework was initially created for international benchmarking, but NITI Aayog is currently using it as a planning and diagnostic tool for national and subnational digital policymaking in India.
As Dr. Mishra stressed, "It's not just about measuring where we are; it's about understanding how we can leap ahead." This underscores the necessity of expanding digital adoption across a range of sectors, especially in underserved regions.
Frameworks such as CHIPS could be crucial in bringing corporate strategy, public policy, and digital innovation into alignment as India continues on its path to become a developed country, or Viksit Bharat, by 2047.
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