By Payal Malik & Nikita Jain, The authors work with the ICRIER Prosus Centre for Internet and Digital Economy (IPCIDE)
After 78 years of freedom, does India need digital freedom too? In his Independence Day speech, Prime Minister Narendra Modi said, “From operating systems to cyber security, from deep tech to artificial intelligence, everything should be our own.” He added that “we are working on the world’s platforms”, a status quo that cannot be our destiny. His speech calls for ‘sovereign’ technology, beginning with the operating system (OS). The OS is not merely software but the chokepoint that sets defaults on the six-inch screen most Indians wake up to—defaults that, in turn, shape markets and business models.
If that sounds abstract, India’s own antitrust record makes it concrete. In the Google Android case, the Competition Commission of India (CCI) showed how defaults, including pre-installation bundles and licensing ties, can impact adjacent markets. The order flagged barriers to entry that lock in app developers and users with network effects rendering alternatives commercially implausible. Beyond the handset lies the second gate—the cloud. In July, Microsoft briefly suspended services to Nayara Energy to comply with European Union sanctions. Access was restored, but the episode showed that such platforms through their exclusive control over search engines, retail e-commerce, app stores, cloud storage, and social media control the internet’s bottleneck infrastructure. An entire multi-actor ecosystem of sellers, consumers, advertisers, and application developers depends on them for survival. The challenge is not only platform dominance but the data hegemony that sustains it. So, how do we shape digital sovereignty for a smartphone-led India in the AI age?
It will be less about rebuilding every layer and more about keeping jurisdiction and enforcing appropriate laws, building resilience and home grown capacity. On the handset, contestability could be made real through choice screens and removable preloads, so the home screen reflects user choice rather than contractual defaults. The cloud can be built hybrid by design via keeping crown-jewel workloads on Indian-governed infrastructure, and using hyperscalers for advanced services and recovery. ICRIER Prosus Centre for Internet and Digital Economy’s (IPCIDE) study on cloud computing shows that initiatives like Open Cloud Compute knit smaller providers into interoperable networks, shifting some AI workloads away from hyperscalers.
AI is also becoming an operating layer of its own. If the base OS and app stores are controlled by monopolies, and the infrastructure that runs AI models sits with a handful of hyperscalers, India risks being a feature controlled by the platform. Edge computing deepens this concern as AI workloads move closer to devices. IPCIDE’s study on AI Markets and competition also concludes that India will need sovereign compute, access to datasets, and interoperability across cloud and edge to foster local entrants.
Sceptics say “building an OS is too hard.” Zoho founder Sridhar Vembu recently declared that the company is capable of competing with Microsoft in “breadth and depth,” citing the company’s long-term strategy of building an end-to-end software stack and a commitment to user experience and privacy. India’s IT Minister Ashwini Vaishnaw recently adopting Zoho has further amplified this conversation. We also have jurisprudence from CCI and National Company Law Appellate Tribunal as well as the playbook in Digital Public Infrastructure. What India needs now is institutional follow-through where industrial policy and competition policy meet—building strategic capacity through industrial policy, enforcing contestability with competition law, and bridging them with other governance instruments.
Sovereignty multiplies innovation. India should be a follow-on innovator rather than a follower. That means building on open components and competing where we have comparative advantage like small language models, sectoral applications, and vernacular models. Alongside micro-innovation policies that tweak incentives, there is room for mission-oriented policies that promote large public R&D programmes and target transformative outcomes such as in strategic assets like semiconductors, even if they carry execution risk.
Industrial policy today asserts the State’s role in building digital strategic capacity. Meanwhile, competition policy requires a reset, and updating competition rules, data usage norms, and other such instruments is not a matter of routine regulation. It is about aligning economic sovereignty with the industrial strategy the country has embraced.
However, all this will require courage and a tightrope walk. Major US tech corporations are effectively using their global infrastructure dominance as a geopolitical tool. Any nation that attempts to impose taxes or regulatory constraints risks facing swift economic retaliation—often in the form of tariffs or trade pressure. Sovereignty in the 21st century will be defined not just by borders, but by control over data, algorithms, and infrastructure. The Indian government must act decisively—by investing in open and sovereign systems, addressing regulatory gaps as well as in-platform accountability through technically-skilled regulators, and building strong legal frameworks.
With inputs from Raj Kumar Shahi, IT Manager, ICRIER
