Unlocking India's $200 Billion Metaverse and Web3 Market: Insights and Opportunities

A recent report by Arthur D. Little, titled "Web3 & Metaverse – The Rise of the New Internet & the India Opportunity," reveals the transformative potential of the Metaverse across various industries worldwide. The report projects a remarkable $13 billion global opportunity and predicts that India's Metaverse and Web3 market will reach a staggering $200 billion by 2035. It emphasizes the pivotal role of the retail and financial services sectors in driving the adoption of Web3 and the Metaverse in India.

The report provides an extensive analysis of Web3 and Metaverse technologies, shedding light on their relevant use cases and their potential impact on growth sectors. It highlights how these emerging technologies are instrumental in shaping the next iteration of the Internet, spearheading digital adoption across industries in India. The Web3 and Metaverse markets are expected to experience an annual growth rate of around 40 percent. Notably, significant investments in this sector contribute to the robust outlook for India's Web3 and Metaverse space, as stated by Barnik Chitran Maitra, Managing Partner at Arthur D. Little India and South Asia. Maitra mentions that Web3 enables content creators and gaming start-ups to directly monetize users, while corporations leverage metaverses to engage meaningfully with their employees and customers.

To fully realize the $200 billion Metaverse and Web3 market potential in India, Maitra emphasizes the necessity for collaboration among startups, investors, corporations, and the government. Furthermore, the report highlights the nascent stage of the Metaverse, which gained significant attention following Facebook's rebranding as Meta. Similar to the development of AI, the Metaverse sparks debates on regulatory oversight, privacy, and user safety. For widespread adoption in India, the report emphasizes the importance of establishing necessary guardrails to protect the interests of all stakeholders.

Maitra proposes a proactive policy approach by the government, acknowledging its support for the Metaverse. Overcoming the cost barrier of augmented reality (AR) and virtual reality (VR) devices is crucial. To address this, the report suggests implementing a favorable policy environment, including tax rebates, incentives, or subsidies, particularly in healthcare and education sectors. Additionally, Maitra advocates for the government's endorsement and visionary approach to the Metaverse. He also highlights the need for a proactive stance from the government regarding hardware and infrastructure, suggesting subsidies and tax breaks to incentivize investments in those areas. The report further highlights the potential integration of fintech solutions in the Web3 ecosystem due to India's leadership in digital payments adoption and the expected growth of e-commerce penetration.

To thrive in the Metaverse, the report offers recommendations for various stakeholders. Investors are advised to establish dedicated teams and accelerator programs to leverage the power of Web3 and the Metaverse. Corporations can collaborate with startups through Web3 and Metaverse sandboxes. Regulators are encouraged to draft supportive policies, incentivize investments, and consider hardware subsidies for AR and VR devices. Pankaj Mann, co-author of the report and Management Consultant at Arthur D. Little, emphasizes the value added by emerging use cases across multiple sectors and industries. Startups are presented with an opportunity to partner with larger corporations, fostering innovation and experimentation in this burgeoning space.