India Pushes Back Against Tech ‘Colonization’ by Internet Giants


NEW DELHI — In India, American firms dominate the web. Fb’s WhatsApp is the most well-liked app on telephones. Nearly each smartphone runs on Google’s Android system. YouTube is the favourite video platform and Amazon is the No. 2 on-line retailer.

For some Indian political leaders, it’s as if their nation — which was dominated by Britain for a century till 1947 — is being conquered by colonial powers yet again.

And they’re decided to cease it.

“As a rustic, now we have to all develop up and say that, you already know, sufficient of this,” Vinit Goenka, a railways official who works on expertise coverage for India’s governing Bharatiya Janata Occasion, mentioned at a convention final week.

In latest months, regulators and ministers throughout India’s authorities have declared their intention to impose robust new guidelines on the expertise trade. Collectively, the laws would finish the free rein that American tech giants have lengthy loved on this nation of 1.three billion individuals, which is the world’s fastest-growing marketplace for new web customers.

Salman Waris, an expert in international technology law at TechLegis in New Delhi, said India was trying to establish strong data protections for its citizens, as Europe did, while giving the government the right to obtain private information as it sees fit, much as China does. Foreign tech companies will have little choice but to go along.

“Everyone is going to fall in line and do what is necessary,” Mr. Waris said. “These companies have to do it in China and Europe, and they will do it here.”

India’s new policies are still a work in progress, with competing government agencies jousting with foreign and domestic lobbyists and policy advocates to shape them.

But new restrictions are definitely coming, said officials and industry executives involved in the process. The country’s Supreme Court declared last summer that Indians have a fundamental right to privacy and pushed Parliament to pass a data privacy law. Prime Minister Narendra Modi and his B.J.P. party have embraced an India-first economic nationalism to address weak job growth ahead of elections next year. Law enforcement authorities are also demanding more legal tools to extract private customer data from WhatsApp, Facebook and financial firms.

“We don’t want to build walls, but at the same time, we explicitly recognize and appreciate that data is a strategic asset,” said Aruna Sundararajan, the nation’s secretary of telecommunications, who has been deeply involved in the policy discussions. “There is a strong feeling in many quarters that the reason that India has not been able to develop a Tencent or Baidu or Alibaba is because we have not been nuanced in our policies.”

The Indian government, which sees data as vital to a whole new generation of technologies such as artificial intelligence, appears particularly determined to reel in Facebook and its WhatsApp messaging service.

Officials were furious after the Cambridge Analytica scandal this year revealed that Facebook had shared private information on 87 million users, including 560,000 Indians, with a political consulting firm that had sought to influence Indian elections.

More recently, the Ministry of Electronics and Information Technology has demanded that WhatsApp create a way to track and stop mass messages, such as a series of false items about child kidnappers that led to the murder of two dozen innocent people by angry mobs.

WhatsApp has refused, saying that building such technology would break the encryption that keeps messages private. The government, for its part, is holding up a new Indian payments service from WhatsApp until it complies with local laws, including a new rule that requires financial data to be stored only in India.

More broadly, the Indian government says it wants to ensure that Indian and foreign companies have to follow the same rules on taxes, data storage, security, pricing and cooperation with law enforcement.

For example, Indian travel agencies complain that current tax laws allow foreign services such as to avoid collecting hotel taxes, which can run as high as 28 percent of the room price. The disparity, they say, gives foreign firms a price advantage.

“It’s not about protectionism. It’s about saying if 10 laws apply to me, the 10 laws should also apply to someone else operating in India,” said Rameesh Kailasam, chief executive of, a newly formed lobbying group that represents local investors and start-ups, including MakeMyTrip and the ride-hailing company Ola.

In a statement, said it made a “full effort” to comply with Indian tax laws.

The big American technology companies are trying to fend off or dilute the regulations behind closed doors. Many consider the topic so sensitive that they refused to discuss it on the record.

In private, the companies say that the proposals would raise their costs, dampen their ability to use Indian data to improve services and dissuade investments like Walmart’s recent $16 billion deal to buy control of Flipkart, the country’s leading online retailer.

They also warned that India has fewer legal protections than the United States against government searches and data requests, so private data stored in the country could more easily end up in the hands of the police.

The issue may become a topic in trade and economic discussions between the United States and Indian governments scheduled for the fall.

Mukesh Aghi, the chief executive of the U.S.-India Strategic Partnership Forum, a policy group whose board includes top executives at Cisco, Adobe, and Mastercard, said that India risked hurting its own economy by imposing stringent rules on foreign tech companies. Forcing data to be stored in India, for example, could prompt similar rules from the United States, which would hurt India’s big outsourcing companies.

India also needs multinational companies to build its tech economy, he said.

“It requires deep pockets. It requires world-class technologies. It requires a global supply chain,” said Mr. Aghi. “These companies are creating jobs.”

Ajay Sawhney, the information technology secretary, who is helping to draft the regulations, said the government was keeping an open mind as it developed the final rules.

“Our framework will be fair to all stakeholders,” he said. “We deeply appreciate the value that the tech companies and their platforms bring to our country.”

Follow Vindu Goel on Twitter: @vindugoel.

Focused on All Issues Tech? Get the Bits e-newsletter delivered to your inbox weekly for the newest from Silicon Valley and the expertise trade.


Please enter your comment!
Please enter your name here