The global power is shifting from traditional geopolitical control to digital dominance driven by Big Tech. India must protect its digital autonomy in an increasingly data-driven world.

Shift in Global Power

• Rise of Digital Colonialism: Big Tech companies behave like new-age colonial actors, extracting data and shaping national choices without using military force.
• Data Replacing Traditional Power Sources: Data has replaced oil fields and chokepoints as the core resource determining global influence and economic potential.

Data as the New Strategic Resource

• Data as Modern Oil: The central resource of the 21st century is data, which drives innovation, commerce, surveillance, and political influence.
• Digital Footprints as Assets: A country’s digital footprint is now equivalent to economic wealth, shaping its competitive position globally.

India’s Digital Trilemma

• Digital Ascendancy (US Model): The US controls global information and financial systems, including SWIFT, giving it unmatched digital leverage. 
  • The dominance of the US dollar enables the US to freeze assets or impose sanctions, affecting nations like Russia and Iran.
  • US pressure has previously forced India to dilute measures like the Equalisation Levy, showing the risks of over-reliance.
• Digital Capitulation (Digital Slavery): Indonesia gave up the right to levy customs duties on data flows, losing control over its digital economic architecture.
  • Malaysia agreed not to tax digital services, not to discriminate against US tech firms, and even gave up source code inspection rights. 
  • Despite promoting global openness, the US enforces restrictions domestically such as forcing TikTok to store data locally and blocking Huawei.
• Digital Sovereignty (India’s Preferred Path): India must retain control over data exports to safeguard economic value and prevent foreign dominance. 
  • Regulatory autonomy is essential so India can craft laws suited to its interests without external pressure.

India’s Digital Challenge

• Low Value Capture Despite High Exports: India exports $224 billion in software, but much of the value accrues abroad because solutions are owned by foreign firms.
• Need for Indigenous High-Value Innovation: India must move beyond coding services to build proprietary digital and AI products that create wealth domestically.
• Limitations of Exclusion Strategy: India cannot fully block US tech firms due to its democratic market ethos and deep digital integration.

Lessons from the China Model

• Great Firewall for Domestic Space: By excluding companies like Google and Facebook, China enabled its domestic players to dominate its digital market.
• Creation of a Sovereign Tech Stack: China built its own ecosystem—from processors to cloud services—ensuring full digital self-reliance.
• Impact on Economic Expansion: This strategy helped China build a $7 trillion digital economy, contributing 40% to national GDP.

Government Measures For Digital Sovereignty

• Strengthening Data Protection (DPDPA): The Digital Personal Data Protection Act provides a foundation for asserting control over data processing and transfer.
• Leveraging Digital Public Infrastructure (DPI): Platforms like Aadhaar, UPI, and DigiLocker offer India a unique digital backbone for innovation and governance.
• Investing in Frontier Technologies: Government missions in semiconductors, AI, and quantum computing aim to create long-term strategic autonomy.

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Way Forward

• Avoid Restrictive FTA Provisions: India must ensure that Free Trade Agreements do not include clauses preventing digital regulation or non-discriminatory policies that handicap Indian startups.
• Balanced Global Digital Engagement: India should engage with global digital norms and alliances while ensuring that cooperation does not compromise national interests.
• Domestic Digital Champions: Targeted incentives, market access, and public procurement reforms can help Indian tech firms scale globally, while building sovereign capacity is essential to avoid becoming a technologically advanced yet digitally dependent nation.
• High-Value Domestic Innovation Capacity: Policy support should shift India from low-end code-writing to high-value product development, IP creation, and indigenous AI models.

Conclusion

India must pursue digital sovereignty by promoting innovation and protecting autonomy, ensuring that digitisation strengthens the national power.

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