Digital Sovereignty – Urgent Need for a Digital Sovereignty Law
27 Sep, 2025.
New Delhi: iSPIRT and SITARA joined forces to urge that India protect its Digital Sovereignty by launching a Digital Industrialisation Strategy to develop sovereign clouds, apps, platforms, mobile and enterprise OS, and the corresponding hardware stack, and enact a Digital Sovereignty Law.
India, with its vast market and rapidly expanding digital economy, cannot allow foreign digital platforms to siphon off Indian data and profits and potentially weaponise it, while hiding behind foreign jurisdictions. China’s US$2 trillion digital economy demonstrates the concrete benefits of digital sovereignty. In contrast, India’s digital exports, at US$220 billion, largely generate trillion-dollar profits abroad for foreign companies, with Nvidia’s valuation quadrupling in two years to US$4 trillion, with limited domestic multipliers. The bulk of Nvidia’s engineering workforce is from India.
To this end we wrote to the Prime Minister’s Office on September 25, and held a seminar sponsored by Bharath Digital Infrastructure Association led by its indomitable Secretary General Abhishek Bhatt at the prestigious India International Centre (press release can be accessed here also) on September 22, 2025. Ambassador Ashok Kantha chaired the meeting with Dr Sasmit Patra, Hon’ble MP leading the Q&A and other SITARA experts contributing their insights. We shall soon post the record.
We recorded our appreciation for the welcome steps taken by Government to catalyse a high-tech, indigenous digital ecosystem through initiatives such as the Digital Public Infrastructure (DPI), Jan Dhan, Aadhaar, UPI, the National AI and Quantum Missions and the Semiconductor Mission. Additionally, the RDI initiative with significant funding for the private sector, has the potential to revolutionise India’s R&D landscape.
In the Free Trade Agreements (FTAs), India has rightly kept sensitive sectors such as agriculture, dairy, and genetically modified products out of bounds. However, concessions on source code access, cross-border data flows, open government data, local presence, and prohibitions on digital custom duties – risk undermining India’s digital sovereignty. Additionally, while the free movement of skilled workers and the H1B visa issue are important, they cannot justify yielding on India’s core digital interests. These concessions are already apart from the asymmetrical access to India’s public procurement system and the preference for voluntary licensing in the FTA texts already conceded in the UK FTA. At a time when the United States is taking extremely unreasonable steps aimed at extracting further concessions, accepting such terms could derail India’s ambition to emerge as a global Digital Power.
The Nayara case, where Microsoft and SAP withdrew essential cloud services due to EU sanctions, also illustrates our vulnerability. Indian courts, lacking the legal framework for holding global digital companies accountable, refused interim relief for Nayara. Earlier, on being summoned by the Supreme Court of India regarding content regulation issues, Google India had deflected responsibility to its US parent.
Strategic Imperative
All the above highlights the urgent need for a Digital Sovereignty Law defining Indian authority over all digital actors and infrastructure within its jurisdiction and a Digital Industrialisation Strategy to expand Indian capacity. Ironically, the United States —whose Big Tech companies have transgressed digital sovereignty around the world, prompting constant alarm in the EU—has also evolved the best model for sovereign oversight. Washington recently initiated the forced divestiture of Tik Tok, ring-fencing TikTok from its Chinese parent, subjecting algorithm use to domestic control/ royalties, and confining sensitive operations to transparent “clean rooms”. Thus, powerful foreign tech giants can be forced to comply with national rules when governments act decisively, although it is not always necessary to uniformly follow the US template of complete ownership change, only for ‘local presence’ with specified conditions.
India should therefore develop its own approach on Digital Sovereignty, requiring foreign entities to operate through subsidiaries incorporated here subject to Indian law, audits, and enforcement. Violations must carry penalties like heavy fines, suspension or expulsion. The Indian Government must move high risk sectors containing critical data in DigiLocker, GeM and the national highways data repositories and any other critical data – to sovereign indigenous Indian Clouds and ensure that foreign clouds do not misappropriate the term “sovereign”. It must be borne in mind that US companies are required to share any data they hold anywhere in the world with the US Government as per the Cloud and FISA Acts, on top of other executive orders and requirements.
India can also take appropriate lessons from all around, enlisting allies like the EU and the bigger developing countries like Brazil, South Africa, and Indonesia, who are all deeply concerned about their digital sovereignty. This is a good place for India to exhibit its Vishwaguru leadership. We are convinced that this can be done while maintaining India’s economic and political relationship with its key allies, as also retaining the best digital services for its people.
As is widely known, national power increasingly rests on technological capability, which in turn depends on a robust foundational digital ecosystem. Without immediate action, India risks a systemic erosion of its digital industrial base, with the net effect being crippling India as a viable economy, unable to make sovereign choices. We have appealed to Hon’ble Prime Minister that this be taken up urgently at the highest levels before any more concessions are made which could lock India into digital subservience in perpetuity – and a Digital SovereigntyLaw applying Constitutional principles to the digital realm be enacted. Because as per our Constitution, the Indian Republic exercises unquestionable sovereignty, power and authority, answerable to none. India cannot repeat past errors of allowing foreign platforms to entrench themselves before laws on digital sovereignty ensuring that foreign firms operate on India’s terms – are passed.
The time to act is now. India’s technological and economic future, as well as its strategic autonomy, depend on it. We have thus urgently appealed that Government:
- Launch a Digital Industrialisation Strategy to develop sovereign cloud, apps, platforms, mobile and enterprise OS, and the corresponding hardware stack.
- India enact a Digital Sovereignty Law.
Details are at Annex A of the attached letter.
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