"There are also sizeable urban versus rural differences. For example, only 3.6 per cent of the 833 million Indians living in rural areas are active Internet users, and one-third of those have to travel for more than ten miles to visit a cybercafe," it said.

The study, however, sounded optimistic on spread of Internet usage with help of government's effort in pipeline.

But the report raised concern on low level of credit card penetration in India checking growth of e-commerce.

"On both fronts, India stands at an abysmally low penetration of 2 per cent compared to South Korea, Taiwan and Singapore," the report said.

It raised issue of Internet laws in India and said "poorly worded or confusingly interpreted pieces of legislation--notably those in India and Thailand--create uncertainty for business owners, as well as high administrative costs in order to put safeguards in place."

Speaking at the launch of the report, Laurel West of Economist Intelligence Unit said "While the Ministry of Communications and Information Technology is responsible for the frequent issue of laws relating to Internet governance, there is no specific regulatory body for content and platform creators."

He added that there is no central avenue for communication with businesses that will be affected by changes in the law.

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