Kedar Bhasme
The world of diplomacy has been transformed by technology companies that exercise power once reserved for states. In New Delhi, this shift prompts a profound recalibration of how sovereignty and governance intersect in digital realms. Google, Meta, Amazon, and Apple now control infrastructure and data flows in borderless cyberspaces. Their platforms shape everything from public debate to commerce, and in doing so they behave like quasi-governments. India’s response seeks to preserve democratic values while asserting national authority over global tech actors.
India’s push for digital sovereignty draws on a post-colonial awareness of outside control. Historical memory of extraction under the East India Company looms large when policymakers debate platform regulation. References to “digital colonialism” aren’t mere rhetoric; they signal genuine anxiety that unregulated data flows could recreate patterns of economic dependency. The Digital Personal Data Protection Act of 2023 marks New Delhi’s boldest effort yet.
It demands that “critical” personal data remain within Indian borders and places strict limits on cross-border transfers of sensitive information. Unlike the EU’s GDPR, which prioritizes individual rights, India’s law elevates state oversight as a bulwark of national autonomy [1] [2]. Beyond regulation, India has built public digital infrastructure that rivals private platforms. Aadhaar and the Unified Payments Interface, or UPI, show how a state- driven model can scale inclusively.
Today UPI handles nearly half of all digitaltransactions worldwide. That feat underlines a key lesson: democratic governments candesign and deploy platforms that serve citizens without ceding control to corporateinterests. Sri Lanka, Mauritius, and the Philippines are exploring elements of India Stack, drawn by its promise of openness married to accountability [3] [4] .
Negotiating with these “sovereign firms” tests long-held ideas about diplomacy. Traditional state-to-state bargaining assumes sovereign equality, but tech giants rival or exceed many nations in reach and influence. When a platform threatens to suspend services for millions of users, it wields coercive power akin to an embargo. India’s experiment with a 6 percent equalization levy on digital advertising, dubbed the “Google Tax”, put this into stark relief. Under pressure from Washington, New Delhi repealed the levy, highlighting how tech conflicts can escalate into broader geopolitical standoffs [5] [6] .
Content regulation presents a similar dilemma. India’s Information Technology Rules impose requirements on global platforms: chief compliance officers based in India, grievance redressal mechanisms, automated content removal. Yet enforcement remains uneven. Platforms can resist by threatening market withdrawal, forcing Indian regulators to weigh enforcement zeal against the risk of depriving citizens of critical services [7] . In response, India has embraced strategic autonomy.
Its partnership with the United States under the Initiative on Critical and Emerging Technology, or iCET, pools resources on semiconductors, AI, and quantum computing. Still, New Delhi insists on preserving its regulatory vision. Collaboration under iCET is neither capitulation nor alignment; it is a calculated engagement to access technology while reinforcing democratic norms [8] .
India’s 2023–24 G20 presidency further elevated digital governance. New Delhi positioned its Digital Public Infrastructure as a “third way” between Chinese state-centric systems and American corporate networks. By doing so, it offered developing nations an alternative blueprint for inclusive, accountable digital ecosystems. In BRICS forums, India has showcased initiatives like Sanchar Saathi, which tackles telecom fraud, and the Aadhaar ID system as public goods. Though cooperating with China and Russia on cybersecurity standards, New Delhi stops short of endorsing authoritarian digital models [9] .
The global architecture of digital taxation underscores the limits of multilateral governance. The OECD’s Two-Pillar Plan seeks to reallocate taxing rights and impose a global minimum tax on multinational profits. India supports Pillar One’s market jurisdiction principle and Pillar Two’s minimum tax. Both address glaring inequities that let tech firms book profits where they have no real economic presence. Yet ratification requires consensus among countries representing 60 percent of affected corporations. That gives major economies, particularly the United States, veto power, underscoring how platform home states can stymie reforms that threaten corporate interests [10] [11] .
Underlying these struggles is a deeper asymmetry. India can threaten to restrict market access, but platforms control essential digital arteries on which millions depend. This “governed interdependence” means that unilateral rules risk collateral damage. Recognizing this, New Delhi has pursued initiatives like the Open Network for Digital Commerce. By fostering an interoperable framework for e-commerce, ONDC reduces reliance on any single platform. Similarly, the India Semiconductor Mission aims to build domestic chip-making capacity, targeting the root of technological dependency. These efforts show that true sovereignty demands more than rules; it requires homegrown capabilities to offer credible alternatives [12] .
India’s experience holds lessons for other democracies wrestling with tech dominance. First, digital sovereignty must combine regulation with investments in public infrastructure. Second, coalitions of like-minded states can tilt the balance in global negotiations. Third, defending sovereignty need not mean closing markets; openness and accountability can coexist.
Yet the Westphalian model struggles to account for actors that blur public and private roles. Tech platforms deliver essential services without democratic checks and balances. That calls for new governance mechanisms capable of negotiating code, not just treaties. Such institutions should embed public interest voices alongside industry and state delegations.
As artificial intelligence and other emerging technologies deepen digital dependencies, the stakes will only rise. India’s path suggests that success depends on regulatory nuance, allied partnerships, and relentless innovation. It must refine its domestic laws, strengthen alternative infrastructures, and drive multilateral reforms that reflect digital realities.
If India’s blend of digital sovereignty and strategic autonomy endures, it will chart a course for democracies seeking to reclaim authority from sovereign tech giants. If it falters, its struggle will warn how even large states can see their governance hollowed out by unaccountable corporate power. India’s experiment thus has implications far beyond its borders. The world will watch as New Delhi negotiates with sovereign firms on behalf of its democracy and its citizens.
References
[1] Ramakrishnan, V. 2025. The Rise of Neo-Nativism in Indian Tech Policy: A Lexicon Guide. Stratink Consulting, August 1, 2025. Available at: https://stratinkconsulting.com/inkurated/how-indian-tech-policy- is-pushing-for-digital-sovereignty, Accessed on: August 20, 2025.
[2] Agama Law Associates (AA). 2025. Data Localization Laws In India: Balancing Compliance With Global Business Operations. Mondaq, March 6, 2025. Available at: https://www.mondaq.com/india/data-protection/1594030/data-localization-laws-in-india-balancing-compliance-with-global-business-operations, Accessed on: August 20, 2025.
[3] Civilsdaily. 2025. Digital Diplomacy: Are digital alliances redefining traditional notions of sovereignty? Civilsdaily, August 18, 2025. Available at: https://www.civilsdaily.com/digital-diplomacy-are-digital-alliances-redefining-traditional-notions-of-sovereignty/, Accessed on: August 20, 2025.
[4] Shetty, S., & Paikine, R. 2023. Digital Diplomacy Paves Road to Internationalizing DPIs. Sahamati, October 20, 2023. Available at: https://sahamati.org.in/digital-diplomacy-paves-road-to-internationalizing-dpis/, Accessed on: August 20, 2025.
[5] Barik, S. 2025. Govt proposes to abolish 6% ‘Google tax’ amid US tariff pressure. The Indian Express, March 25, 2025. Available at: https://indianexpress.com/article/business/govt-proposes-to-abolish-6-google-tax-amid-us-tariff-pressure-9904097/, Accessed on: August 20, 2025.
[6] TOI Tech Desk. 2025. India removes Google Tax starting April 1: What this means for Google, Amazon and other online giants. The Times of India, March 25, 2025. Available at:
https://timesofindia.indiatimes.com/technology/tech-news/india-removes-google-tax-starting-april-1-what-this-means-for-google-amazon-and-other-online-giants/articleshow/119491145.cms, Accessed on: August 20, 2025.
[7] Information Technology and Innovation Foundation. 2025. India’s Content Moderation Regulation. Big Tech Policy Tracker, June 10, 2025. Available at: https://itif.org/publications/2025/06/09/india-content-moderation-regulation/, Accessed on: August 20, 2025.
[8] Avi-Yonah, R. S., Kim, Young Ran (Christine), and Sam, Karen. 2022. “A New Framework for Digital Taxation.” Harvard International Law Journal, vol. 63, no. 2, pp. 279–341. Available at: https://journals.law.harvard.edu/ilj/wpcontent/uploads/sites/84/HLI204_crop-3.pdf, Accessed on: August 20, 2025.
[9] Ministry of Communications. 2025. India leads Capacity Building Initiative on Digital Transformation in BRICS. Press Information Bureau, May 23, 2025. Available at:
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2130821, Accessed on: August 20, 2025.
[10] OECD. 2023. Tax Challenges Arising from the Digitalisation of the Economy – Subject to Tax Rule (Pillar Two. OECD Publishing, Paris. Available at: https://www.oecd.org/en/publications/2023/07/tax-challenges-arising-from-thedigitalisation-of-the-economy-subject-to-tax-rule-pillar-two_ce8257ba.html (via DOI 10.1787/9afd6856-en), Accessed on: August 20, 2025.
[11] Brosy, T. 2025. A Primer on Digital Service Taxes and the OECD’s Two Pillars. Tax Policy Center, Urban Institute & Brookings Institution, May 6, 2025. Available at: https://taxpolicycenter.org/sites/default/files/2025-05/A-Primer-on-Digital-Service-Taxes-and-the-OECD’s-Two-Pillars.pdf, Accessed on: August 20, 2025.
[12] Dash, B., Sharma, P., Ansari, M. F., & Swayamsiddha, S. 2022. A Review of ONDC’s Digital Warfare in India Taking on the e-Commerce Giants. SSRN Electronic Journal. Available at: https://ssrn.com/abstract=4323963 or http://dx.doi.org/10.2139/ssrn.4323963, Accessed on: August 20, 2025.
About the contributor: Kedar Bhasme is Delivery Lead, LegalEase Solutions | Student, South Asian University & NLSIU, Bangalore. He is a fellow of DFPGYF Diplomacy, Foreign Policy & Geopolitics Youth Fellowship- Cohort 2.0.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
Read more at IMPRI:
India-Africa: Leveraging Digital Public Infrastructure for Economic Growth (2025)
India – Nordic Nations: Blue Economy and Maritime Trade
Acknowledgement: This article was posted by Shivashish Narayan, a visiting researcher at IMPRI.
