Digital Dependency Dilemma: GTRI Warns India’s Overreliance on US Tech Poses Economic and Security Risks

In a sobering new report, the Global Trade Research Initiative (GTRI) has raised red flags over India’s deep reliance on U.S.-based software, cloud infrastructure, and social media platforms—warning that this digital dependence could pose a significant economic and national security vulnerability, especially in times of geopolitical tension.

 

The report, released on September 14, 2025, urges India to urgently pursue digital sovereignty through a phased strategy dubbed the “Digital Swaraj Mission.” This initiative aims to reduce foreign tech reliance and build indigenous capabilities in operating systems, cloud computing, cybersecurity, and artificial intelligence by 2030.

 

A Fragile Backbone in a Volatile World

According to GTRI, India’s digital infrastructure—from smartphones and government systems to banking and defense—is overwhelmingly built on U.S. technologies. Over 500 million Indian smartphones run on Google’s Android OS, while critical government and financial services rely on American cloud providers like Amazon Web Services and Microsoft Azure.

 

This reliance, the report warns, leaves India exposed to potential service disruptions or data access restrictions should diplomatic relations sour. “A U.S.-ordered cutoff could instantly paralyze digital payments, tax filings, and government services nationwide,” the report states.

 

The vulnerability isn’t limited to infrastructure. GTRI highlights how U.S.-controlled social media platforms and their algorithms can influence public discourse, making India susceptible to disinformation campaigns and social unrest.

 

Strategic Risks Beyond Tariffs

While India is already grappling with external shocks—such as the recent 50% tariffs imposed by the U.S. on Indian goods—the GTRI report argues that the deeper strategic threat lies in its digital dependence. “In an era of tariffs, sanctions, and technology wars, sovereignty will be measured not just by territory or trade, but by control over digital infrastructure,” said Ajay Srivastava, founder of GTRI.

 

The report draws comparisons with China and the European Union, both of which have taken decisive steps to build sovereign digital ecosystems. China has replaced foreign code in government and defense systems with indigenous platforms, while the EU enforces the Digital Markets Act and is investing heavily in sovereign cloud technologies.

 

The Digital Swaraj Roadmap

To counter these vulnerabilities, GTRI proposes a three-phase roadmap:

 

Short Term (1–2 years):

Medium Term (3–5 years):

Long Term (5–7 years):

GTRI emphasizes that India has both the talent and the market to achieve these goals. Citing the success of UPI and ONDC, the report argues that India can replicate this model for core digital infrastructure.

 

Data as a Strategic Asset

One of the most compelling arguments in the report is the call to treat India’s vast data pool as a strategic resource—akin to oil or rare earth minerals. With over a billion users generating data daily, India fuels the AI models and ad revenues of U.S. tech giants. GTRI suggests that India should insist on local data storage, tax digital transactions, and develop its own AI ecosystem to convert this data into bargaining power in global negotiations.

 

What Lies Ahead

The GTRI report has sparked renewed debate among policymakers, technologists, and economists. While some argue that complete digital independence is unrealistic in a globally interconnected world, others see the Digital Swaraj Mission as a necessary step toward resilience and strategic autonomy.

 

As India continues to navigate complex geopolitical terrain, the question is no longer whether digital sovereignty matters—but how quickly and effectively it can be achieved.

 

Sources: MSN News, Moneycontrol, ET Telecom