The Shift in Global Power Dynamics
The global power dynamics have shifted from traditional control over oil fields and naval chokepoints to data being the new currency of power. For India, a growing economic power, the choice between digital ascendancy, capitulation, or sovereignty is crucial for future prosperity and national dignity.
Digital Ascendancy Model
The United States currently dominates the digital ascendancy model, characterized by controlling global information, data, and financial systems. This has been weaponized, as seen in the exclusion of Iran and Russia from global financial systems. This control acts as a deterrent against sovereign actions, as seen in India's constrained ability to secure cheap Russian crude due to risks associated with the dollar-denominated financial system.
Implications for India
- India was pressured into withdrawing provisions for digital taxation and trade to accommodate Western interests.
- The ascendancy model demands acquiescence, affecting the digital sovereignty of other nations.
Digital Capitulation: A Cautionary Tale
Countries like Indonesia and Malaysia have surrendered digital autonomy for short-term trade gains, committing to policies that undermine national digital industrial policies. These include moratoriums on data customs duties and refraining from imposing digital services taxes.
Double Standards
- The US's forced divestiture of TikTok and demands for data localization highlight the discrepancy in digital trade agreements.
- Such agreements are more about cementing digital subservience than promoting free trade.
The Path to Digital Sovereignty
India must pursue digital sovereignty, establishing legal and regulatory frameworks to control data exports and regulate its digital space.
Lessons from China
- China's exclusion of Big Tech facilitated the growth of companies like Alibaba and Tencent, contributing significantly to its GDP.
- India's software exports, while substantial, do not create equivalent domestic value.
Leveraging Digital Talent
- India should use its pool of software engineers as a negotiating tool rather than seeking relaxed immigration controls.
Strategic Framework for Digital Sovereignty
India should adopt a digital industrialization policy framework that includes:
- Notification of Digital Personal Data Protection Rules to ensure domestic laws override international commitments.
- Development of Digital Public Infrastructure (DPI), Aadhaar, India Stack, and strategic focus on AI, semiconductors, and quantum computing.
Risks of Free Trade Agreements
- Clauses preventing discrimination against digital services would hinder the promotion of indigenous digital capabilities.
Conclusion: The Choice for India
India must secure its digital future to become a sovereign digital power, fostering its digital giants and capturing wealth generated from its data. This is crucial to prevent becoming a subservient state in a new digital era.