India is witnessing a rapid invasion of digital media in the society and a need for digital literacy for the people emerges. The fact that India is the second largest online market ranking just below China with over 460 million internet users and with strong penetration of internet backed by technological advancement, digital literacy becomes an integral part of the learning and training objectives of almost everyone. Digital literacy is an empowering tool for adolescents and youth. It has the potential to raise the literacy levels in rural areas and give young people the functional knowledge to be aware and responsible citizens. To prepare for the wave of digital transformation, building digital skills is as essential as creating digital infrastructure, starting with a progressive focus on digital literacy and general literacy. Those who lack either will find themselves side-lined. This has been recognized as UNESCO’s Sustainable Development Goal 4 (SDG4), where one of the monitoring indicators calls on countries to track digital literacy skills. The inevitable and rapidly evolving human-machine relationship will mean that either we are driven by technology, or that we drive the change. The present paper focuses on importance and status of digital literacy in India, steps taken by government to spread digital literacy at different levels, and what more can be done in this regard.