A moral reckoning in Silicon Valley, an unconventional US President, an aggressive government in Delhi, and a bunch of newly confident Indian startups have created a perfect a storm of events. The Indian technology lobby has never had it this good.
In the last 12 months, Indian technology lobby supported key policy changes: stringent rules on storing financial data within India, a proposal to make technology intermediaries more accountable for content posted on them, and a protectionist foreign investment rules in Indian e-commerce.
While Reliance Jio, PayTM and Sharechat cheered, Facebook, Google, Amazon, and China’s ByteDance lost sleep. Reliance Industries Chairman Mukesh Ambani, in December, raised a war cry against “data colonization” of Indian user data by foreign companies. Data freedom, he said, is as precious as the freedom won in 1947.
“American startups have market depth and Chinese startups have wallet depth. They are infiltrating the country. What do Indian startups have?” said a technology startup founder, on the condition of anonymity. “We need protection the way China had. Look at how big their technology industry has grown. We, at least, now have an Indian lobby.”
Indian technology companies are ready to fight tooth and nail to retain control over the ‘Next Billion Users’ against US and Chinese giants. They have already lost the first 200 million Internet users to the US tech giants. Recent policy submissions by Jio, PayTM and Sharechat call for US tech’s higher legal accountability to India and local incorporation.
Homegrown internet companies have reached a certain size and sophistication, and are deploying lobbying power in the service of their own goals. Indian entrepreneurs now feel that they can chart their own course and not rely on others. Phrases such as data sovereignty and data colonization are now often used in the power corridors of New Delhi.
“The technology industry has split into ‘Swadesi’ and ‘Videsi’ lobbies. On one side, there is Reliance, PayTM, Sharechat, and lobby groups like IndiaTech.org, and I-Spirt (Indian Software Products Industry Round Table). On the other side, there is Walmart, Amazon, Facebook, Google,” said a Bangalore-based technology lawyer.
Jio, PayTM, Facebook and Google did not reply to emails seeking a comment. Amazon declined to comment.
The reasons for the emergence of a powerful ‘desi’ technology lobby are manifold and complex, and many say it is not a sudden development.
THE DECLINE OF VIDESI, THE RISE OF DESI
The US technology giants, particularly Facebook, Google and Twitter, are no longer seen as a force of good. Governments across the world are asking some hard questions on their concentration of data, their influence on politics and society in general besides their opaque business practices.
This coincided with the election of Donald Trump as the president of the US, who has accused technology companies of avoiding taxes, suppressing Republican voices and spreading misinformation.
“US diplomatic power is at a low ebb thanks in part to tensions between the Trump administration and the State Department – this has blunted the usually powerful and well-coordinated response of the US government towards Indian policies which could negatively affect US business interests,” said Vinay Kesari, a technology lawyer, who has worked with a multitude of US and Indian technology companies in his career.
The decline of US technology lobby in India coincided with the emergence of nationalistic voices in the Indian technology sector. iSPIRT and Indiatech.org are playing a key role in pushing the Indian startups’ agenda in Delhi.
“This is an emerging sector that needs a focused approach since it has a strategic value for India in the global space. It has to be nurtured the way the US and China have done. We are asking for things to enable the Indian technology sector, the same way the US and China did to grow theirs,” said Rameesh Kailasam, CEO at IndiaTech.org, a domestic lobby body that counts Ola, Hike, and MakeMyTrip as its members.
Nandan Nilekani, the architect of Aadhaar, has called for the need to avoid data colonisation by foreign tech giants and allow for genuine empowerment by letting people control the data they generate.
Industry bodies such as CII, FICCI and Nasscom, who earlier championed the Indian cause, started taking a more ‘balanced’ approach once its membership base became global, leading to a diluted position. Nasscom is still seen as a voice for IT and allied services industry.
“With foreign players entering the fray, some of the trade bodies have become voices for global giants, leading Indian companies to realize that they need to find their own way to make their voices heard,” said Berges Y Malu, head, public policy, at ShareChat. “This has led to new bodies such as IndiaTech as well Indian firms looking to build their own policy advocacy teams to ensure the voice of Indian entrepreneurs is not drowned by the muscle of large global entities.”
THE GOVT IS LISTENING TO INDIA TECH
When it comes to technology policy making, experts say, the Indian government is more confident now, both at the bureaucratic and political level. Bureaucrats are today often armed with technical and policy solutions with inputs from domestic legal and policy thinktanks.
Despite restrictions, India is a huge market with its growing economy that US and Chinese technology companies cannot ignore.
Global firms complied with the Reserve Bank of India’s mandate to host and process payment data in local servers, despite their initial reluctance.
“The government is reaching out to Indian entrepreneurs and listening to their concerns. Indian companies have realised that they need to nurture their relationship with the government. The relationship between the Indian tech industry and regulators has changed. They are aligning their policy objectives.
Earlier, the US companies were used to getting their way,” said Tanuj Bhojwani, venture capitalist and core volunteer at iSpirt.
Many are worried that protectionist policies by the government may result in some form of backlash from the US and China. Indian startups such as Ola, Oyo, Zomato are spreading their wings globally and would be hurt if similar laws such as mandatory domestic incorporation or data localisation are implemented. Some US lobby groups have already warned of a possible trade war.
“The Indian technology lobby has come of age and due to that, they are actively lobbying to align their goals with policy decisions. It is a huge departure from before. However, they must keep in mind that their protectionist approach may affect their global ambitions in the future. It may become an international trend soon if India adopts protectionism,” said Nikhil Narendran, partner at Trilegal, a law firm.
Another fallout India could face is that foreign investors may become wary of investing in India and Indian consumers would lose out on more choice.
“There is definitely angst against big foreign technology companies within the government. The government does not want to be seen making policies that hurt small traders. We should boost domestic businesses, but not at the cost of foreign investment,” said a senior technology policy lawyer in New Delhi.