With a confident new generation of innovators, India now has the scale and self-belief to shape its own digital destiny marked by creation, observes Ajay Kumar chairman, UPSC.
Illustration: Dominic Xavier/Rediff
American platforms such as WhatsApp, Instagram, YouTube, Facebook (Meta), and X dominate India’s digital space, drawing hundreds of millions of users — yet most of the economic value flows abroad.
If revenues reflected user share, Meta’s 900 million Indian users alone would represent about $45 billion annually. Across platforms like Google, Amazon, and Microsoft, India’s digital engagement exceeds $100 billion in value captured overseas.
In contrast, China blocked global apps early on and fostered homegrown giants such as Alibaba, Tencent, Baidu, Weibo, and ByteDance, keeping the value of its 1.4 billion users within its borders.
Today, firms like ByteDance ($155 billion) and Alibaba ($137 billion) rival India’s largest conglomerates, including Reliance and Tata in scale.
Had India pursued a similar path instead of focusing primarily on technology for governance and inclusion, much of the revenue, jobs, and innovation now concentrated abroad could have strengthened India’s own digital economy.
Beyond economics, control of user data is now strategic power. Data reveals social trends and political moods, shaping markets and democracies.
The Cambridge Analytica scandal showed how Facebook data could influence elections, while Google and Amazon use data dominance to strengthen their grip on artificial intelligence and commerce.
Even WhatsApp’s reported backdoor access for US agencies raises sovereignty concerns.
For India, hosting nearly a billion internet users, ensuring sovereignty over its data is not just an economic goal but a cornerstone of digital independence and national security.
Unlike China’s State-controlled firewall, India operates in an open, globally connected Internet.
A ‘Great Firewall’ model would neither suit India’s democracy nor its millions already on global platforms.
India’s path must be to compete, not close — by building homegrown platforms that win users by choice through innovation, security, and local relevance.
India’s biggest challenge lies in the powerful network effects of global platforms, where users gain more value by staying, shutting out new competitors.
Yet the past decade has seen a turning point — the rise of Indian-origin platforms like Zomato, Zoho, Paytm, PhonePe, and Razorpay.
These successes signal a deeper shift: India’s digital enterprises are ready to challenge global dominance and claim their place at the high table of the digital economy. Several forces are now converging to make this transformation real.
While much attention is on India’s massive digital base — 900 million internet users — the real story lies ahead.
Over the next decade, another 500 million Indians will come online as incomes, education, and connectivity rise.
This next wave represents a vast untapped market for Indian companies to capture with localised, affordable, and culturally attuned solutions.
As homegrown platforms grow, they draw in users traditionally on global platforms. The shift is already visible.
Nykaa, for example, drew neo-rich, new-gen, brand-conscious users from global ecommerce giants.
India’s vast linguistic diversity — once a barrier to digital adoption — is now a strategic advantage.
Homegrown platforms can outpace global rivals by building apps that natively speak to every Indian.
By embedding local language interfaces, and culturally attuned content, Indian startups can unlock untapped markets and turn linguistic depth into a distinct competitive edge.
For years, digital dominance relied on network effects — bigger user bases meant unbeatable platforms. That logic is fading. AI now rewards learning over scale.
As American economist Hal Varian noted in 2019: AI improves through better data and smarter models, not sheer numbers.
Boston University professor James Bessen has shown open-source AI has lowered entry barriers for startups.
In this new era, advantage flows from the depth and diversity of data and the creativity of algorithms.
With its vast, youthful, and diverse population, India has one of the richest user datasets and is well-placed to leverage this shift — from scale to intelligence, from networks to knowledge.
A few decades ago, Indian digital startups struggled to attract the investor backing needed for global scale.
Today, homegrown companies have proven they can innovate, scale, and compete in a mature ecosystem.
The rise of Unified Payments Interface (UPI), Aadhaar, and open network for digital commerce (ONDC) has created a strong foundation for entrepreneurship while robust domestic and global capital flows fuel growth.
The conditions seem right for India to build the next global digital platform. Its new generation is –bold, risk-taking, and driven by ambition.
Gen Z’s confidence and creativity are fuelling a surge of innovation, making world-class digital enterprises from India more likely than ever.
A rising sense of Aatmanirbhar Bharat and ‘vocal for local’ is turning users into agents of economic nationalism and data sovereignty. Many now choose Indian apps to strengthen national capability and retain value at home.
While these trends strengthen the case for India-originated digital platforms, the government can catalyse their growth.
With over 20 million employees, the public sector is one of the world’s largest organised customer bases.
Even partial adoption of Indian platforms for communication, procurement, or data management could create instant scale and credibility.
The government can drive this through incentives and procurement preferences — permitted under the World Trade Organization framework — to prioritise homegrown digital solutions.
India stands at an inflection point in its digital journey — shifting from the world’s largest user base to a major producer of digital power.
National Informatics Centre’s move to host all ‘gov.in’ emails and data on Zoho’s Indian servers or use of Arattai as messenger app marks a decisive step towards digital sovereignty.
With a confident new generation of innovators, India now has the scale and self-belief to shape its own digital destiny marked by creation.
The views are personal.
Feature Presentation: Rajesh Alva/Rediff
