India’s EdTech sector is experiencing remarkable expansion, with its contribution to the nation’s GDP projected to increase significantly from 0.1 per cent in 2020 to 0.4 per cent by 2029. This trajectory underscores the sector’s growing prominence within India’s economy, as revealed in a joint report by the Internet and Mobile Association of India (IAMAI) and Grant Thornton Bharat.

In 2020, when India’s GDP was valued at USD 2.67 trillion, the EdTech market contributed USD 2.8 billion, representing 0.1 per cent of the total GDP. Fast forward to 2024, the EdTech market’s valuation has surged to USD 7.5 billion, with projections indicating a valuation of USD 29 billion by 2030. This growth represents a compound annual growth rate (CAGR) of 25.8 per cent, demonstrating the sector’s resilience and adaptability in the face of economic challenges.

Several factors contribute to this rapid growth. Increased digital adoption, spurred by affordable internet access and widespread smartphone penetration, has transformed the education landscape. Government support through initiatives like Digital India and the National Education Policy 2020 has further boosted the sector. Additionally, evolving consumer preferences for online and hybrid learning models have created new opportunities for EdTech companies to innovate and expand.

Today, India is home to over 17,000 EdTech companies, including seven unicorns, making it the third-largest funded EdTech ecosystem globally, after the United States and China. These figures highlight India’s emergence as a global hub for educational technology and innovation.

Despite its promising growth, the EdTech sector in India has faced significant funding challenges in recent years. The sector witnessed its peak in 2021, securing USD 4.86 billion in investments. However, broader macroeconomic conditions and cautious investor sentiment led to a sharp decline in funding, with investments dropping to USD 2.88 billion in 2022 and plummeting by 87 per cent to USD 535 million in 2023. By the end of 2024, the sector managed to secure around USD 730 million, signaling a gradual recovery but still far from its previous highs.

Despite these hurdles, the Indian EdTech sector remains a vibrant and promising space. Its continued focus on innovation, scalability, and addressing the diverse needs of learners across the country positions it as a key driver of India’s educational and economic transformation. As the sector evolves, it is expected to not only contribute significantly to GDP but also play a pivotal role in shaping the future of education in India.