Sovereign Cloud: The strategic imperative for India’s digital future

Cloud services have remained part of global business conversations for years. However, many Indian firms have become vulnerable to risks they cannot control because of ongoing geopolitical problems, regulatory restrictions, trade sanctions and strategic rivalries regarding technology infrastructure. As countries and companies gain greater awareness vis-à-vis the risks of regulatory non-compliance, data interception and supply chain weaknesses, privacy and sovereignty are not options of choice anymore. Instead, they are key conditions to protect national interest while retaining consumer trust and facilitating uninterrupted operations.

Restrictive Cloud Contracts Versus Data Sovereignty

In such scenarios, the moot point is – do Indian enterprises really control their cloud infrastructure? Or is it being rented under another nation’s legal terms? Let’s not forget that in more than 120 countries, America’s export-control regulations have restricted any use of GPU cloud access and advanced AI chips. As a result, Indian firms, particularly those in AI, research and manufacturing, have been constrained to rejig their compute sourcing as well as how and where they host their AI workloads.

Further, 144 nations enforce national data protection laws, some of which require strict data localisation. Given this scenario, IDC projects* that by the end of 2025, data sovereignty clauses will be mandated by 65% of businesses in their new cloud contracts. Risk is about the divergence of laws and a question of jurisdiction if the problem arises. Despite current risks, most Indian enterprises continue relying on CSPs (cloud service providers) governed under overseas jurisdictions, presuming year-round availability and neutrality of these services.

The fact is that most CSP contracts comply with their home country laws, not India’s. If those overseas laws are revised for whatever reason (export restrictions, sanctions or diplomatic issues), CSPs must comply with their home nation’s laws, irrespective of any domestic partnership contract. Consequently, without committing any contract breach, Indian enterprises could lose access to their data, services or infrastructure primarily due to political decisions taken abroad.

Equally vital is where the control plane (the metadata, orchestration logic and management APIs) resides. If this lies outside India’s jurisdiction, any organisation’s ability to act during a crisis is curtailed.

If there is any dispute or suspension of service, legal recourse needs to be local. However, CSPs operating purely under foreign law leave domestic companies with no leverage during a crisis since the arbitration happens in overseas jurisdictions. Any legal recourse in overseas time zones cannot be timely in restoring mission-critical services. All the above situations make it clear why sovereign cloud services are essential in the Indian scenario.

Why Sovereign Cloud Outdoes Overseas Ones

As diverse segment scale, IT heads will confront the twin challenge of meeting strict compliance mandates while simultaneously promoting innovation. With India’s fast-growing fintech ecosystem anticipated to reach USD 2.1 trillion by 2030, one can’t overlook the importance of sovereign cloud. Regulatory demands apart, sovereign cloud ensures strategic independence of companies by curbing vendor lock-in, maximising costs and facilitating faster innovation.

Besides, sovereign cloud ensures adherence to local, industry-specific regulations, such as RBI mandates and regulations of MeitY, STQC, etc. This is crucial as overseas CSPs struggle with control and compliance issues, especially when dealing with several overlapping mandates across sectors. Considering the vendor lock-ins and exit clauses, migrating from foreign clouds can be both costly and complex. Foreign CSPs also lack proper accountability since they don’t have a physical presence in the country.

It is precisely for these reasons that a sovereign, Made in India, governed by India, for India enterprise-grade cloud platform is imperative. Be it a public entity, a regulated enterprise or an innovation-driven business, sovereign cloud makes sure that the data and digital future remain firmly within their control.

An integrated, enterprise-grade platform can connect cloud, edge and data ecosystems that are purpose-built for mission-critical workloads, having seamless hybrid integrations. Here, high-performance GPU-as-a-service can be maximised for training, inference and generative AI workloads. GPU-as-a-service can also act as a catalyst for AI adoption without heavy capex. By eliminating hidden costs with transparent, upfront pricing and the right infrastructure, a highly scalable cloud can assist firms in controlling expenses, preventing overprovisioning and maximising ROI.

Case Clinching Features

Sovereign cloud’s always on, always secure mechanism means it is designed for high availability, failover protection and disaster recovery. Its end-to-end protection provides zero-trust architecture, encryption by default, network segmentation and 24x7 threat monitoring. A sovereign cloud that comes with full-stack capabilities can cater to the complete AI lifecycle that includes even the inferencing stage. As these models are trained, fine-tuned, quantised and deployed for edge inferencing where data is produced, it permits real-time, low-latency responses.

For organisations that deal with sensitive information, such as companies in the telecommunications and financial services industries, sovereign cloud is indispensable. It covers multilingual models that reflect India’s diverse linguistic landscape. Considering these drivers, the sovereign cloud market is projected to rise substantially to touch USD 250 billion by 2027.

With the global business realm, being no longer neutral, sovereign cloud has emerged as a strategic necessity rooted in continuity, control and risk containment. That is the only way enterprises can expect to survive and thrive in the VUCA world. Tata Communications Vayu Cloud offers a sovereign, enterprise-grade cloud platform, Made in India, for India, governed by India. Designed for regulated enterprises, public institutions, and innovation-driven businesses, Vayu Cloud ensures data, decisions, and the digital future remain secure and within organisational control.

Authored by Neelakantan Venkataraman, Vice President & Global Head of AI, Cloud and Edge Business at Tata Communications