India’s digital growth needs a cloud built for India

India's digital infrastructure stands at a crucial turning point. While the economy is poised to reach $5 trillion, businesses across the country are increasingly realising that their digital foundation needs a robust, scalable, and sovereign cloud infrastructure. As we've seen in other technological transformations, data has become the backbone of business operations, directly impacting their ability to innovate and stay competitive.

As organisations go deeper into their digital journey, digital transformation has become a strategic necessity across sectors driving India’s economic and public service ambitions. However, while India has developed one of the most advanced digital public infrastructures globally, the reliance on public cloud servers—often hosted by multinational hyperscalers—raises concerns about data sovereignty, security, and compliance.

India’s Digital Infrastructure

India has built a strong digital backbone, driven by initiatives like Aadhaar, UPI, and ONDC. These public platforms have set benchmarks in scalability and interoperability, demonstrating the potential of digital infrastructure in accelerating economic growth. The government’s Digital India initiative has accelerated the adoption of cloud-based services, AI-driven automation, and large-scale data processing.

The cloud industry in India is experiencing significant growth, with estimated growth projections at US $36.7 billion by 2027 in Asia Pacific. This growth is primarily driven by the rising adoption of cloud technology in the banking, financial services, insurance (BFSI), healthcare, and business process management (BPM) sectors. These industries handle vast amounts of sensitive client data—often across international borders—making data security essential for uninterrupted digital services.

Challenges with Public Cloud Providers

However, relying on multinational hyperscalers presents compliance challenges with India’s data localisation laws. This could create uncertainties for BPM firms catering to BFSI, healthcare, and government sectors, which are regulated with stricter measures. Moreover, the centralised infrastructure in global locations, while efficient for some use cases, makes it difficult for Indian businesses to meet latency requirements and ensure real-time data availability. Cybersecurity risks and breaches could have direct repercussions on Indian companies, affecting both consumer trust and regulatory compliance.

 Sovereign Cloud as a Solution

To reduce such dependence, a sovereign cloud—designed, deployed, and operated within India is worth considering. The sovereign cloud provides advantages such as regulatory compliance, enhanced security, optimised performance by reducing latency and improved accessibility for businesses operating across tier-2 and tier-3 cities. Further, it boosts economic growth through job creation and innovation in the technology sector.

Cloud as a Strategic Business Investment

Beyond compliance, businesses must recognise cloud infrastructure as a long-term strategic investment rather than a mere operational requirement. In India, sectors that are closely governed by policy and regulation are increasingly realising that decisions around cloud adoption can directly influence their ability to grow, adapt, and maintain public trust.

Financial and non-financial institutions, insurance providers, healthcare networks, and public-facing government services operate in environments where data sovereignty and operational continuity are critical. These organisations deal with highly sensitive data that must be processed, stored, and audited in accordance with evolving regulatory norms. A sovereign cloud gives them the ability to embed compliance into the architecture from the ground up while also providing greater control over how and where data flows. This becomes imperative when regulatory frameworks change in response to geopolitical shifts, data breach risks, or sectoral reforms. By housing infrastructure within national borders, organisations can build digital systems that are more secure, resilient, and better aligned with India’s long-term economic and governance goals.

Equally, the sovereign cloud holds transformative potential for India’s MSME ecosystem. As entrepreneurs in tier-2 and tier-3 cities digitise everything from supply chains to customer engagement, they need cloud services that are responsive, affordable, and rooted in the Indian operating environment. Local infrastructure not only improves latency and reliability but also reduces barriers to entry, enabling smaller businesses to compete on a more level digital playing field. Together, these shifts signal why cloud decisions today go beyond scale and instead factor in sovereignty, resilience, and long-term value creation.

Much like what we've observed in successful digital transformations, companies that take proactive control of their digital infrastructure today will define the future of India's economy, setting new standards for security, compliance, and innovation.

Authored by Satyamohan Yanambaka, CEO, Writer Information