- Data sovereignty refers to the principle that data generated within a country’s borders is subject to that country’s laws and governance structures.
- Digital colonialism mirrors traditional colonialism, in which strong nations impose economic and cultural control over less powerful ones.
- When a company gets registered and functions in India, India provides its sovereign cover. However, a foreign company like Microsoft blocking Nayara Energy’s Operations constitutes the antithesis of sovereignty.
- Digital sovereignty thus requires a parallel ‘digital industrialisation’ policy, with robust efforts for the rapid development of a domestic digital industry.
Concept of Data Sovereignty
Data sovereignty refers to the principle that data generated within a country’s borders is subject to that country’s laws and governance structures. It gives governments, organisations, and individuals control over how their data is collected, stored, processed, and shared. With the growth of cloud computing, businesses are increasingly storing data across multiple jurisdictions, raising concerns about who controls and protects that data. Countries are responding with stricter regulations to ensure that data remains under national jurisdiction. These regulations aim to protect national security, privacy, and economic interests. Examples of such laws include the General Data Protection Regulation (GDPR) in the European Union, India’s Digital Data Personal Protection Act, the California Consumer Privacy Act (CCPA) in the United States, and the Clarifying Lawful Overseas Use of Data (CLOUD) Act, which addresses law enforcement access to data across borders.
For example, if a UK-based financial services firm stores transaction data in the US, questions arise about the UK government’s ability to protect its citizens’ financial information, especially during geopolitical shifts. This uncertainty has led many nations to mandate local storage or impose data transfer restrictions, ensuring control over sensitive data. According to the United Nations Conference on Trade and Development (UNCTAD), 71 % of the countries have enacted data privacy and protection regulations, many of which relate to digital sovereignty, also encompassing data sovereignty.
The concept of Digital colonialism
Colonialism has a long history, dating back to the 15th century when European powers began to explore and conquer other parts of the world. The legacy of colonialism continues to shape global power dynamics today, with many developing countries still struggling to overcome the economic, social, and cultural impacts of colonial rule. Under traditional colonialism, European colonial powers designed railways for plunder by European colonial empires: They bypassed the indigenous populations and linked up commercial and military outposts to seaports. Native people were exploited to extract raw materials, which were sent back to Europe for manufacturing. Surplus European products would then flood the colonies, undermining the indigenous population’s ability to develop its local industries. European colonial powers deployed this infrastructural dominance across their vast empires.
In the digital age, colonialism has taken on new forms, with technology playing a central role in perpetuating digital colonialism. The rise of digital technologies has created new opportunities for exploitation, with corporations and governments using digital and data labour to extract value from developing countries.
Digital colonialism mirrors traditional colonialism, in which strong nations impose economic and cultural control over less powerful ones. However, in the online world, this supremacy manifests as managing digital infrastructure, monopolising user information, and influencing technological standards. Major contributors to digital colonialism include tech behemoths like Google, Amazon, Meta (previously Facebook), Apple, and Microsoft (collectively referred to as “Big Tech”. Their offerings frequently include assurances of complimentary access, streamlined operations, and advancements, yet these advantages frequently conceal value extraction through user data and financial reliance.
One of the most striking features of digital colonialism is the uneven distribution of the internet across the globe. According to Visual Capitalist (2023), internet usage varies dramatically by region, with developed nations having significantly higher levels of internet penetration compared to developing countries. In countries like the United States and those in Western Europe, nearly 100 % of the population has internet access. In contrast, regions in Africa and Asia struggle with limited connectivity, despite ongoing efforts to bridge the digital divide. This global digital divide is illustrated in the image given below.
Source: Visual Capitalist. (2023). https://www.visualcapitalist.com/visualizing-internet-usage-by-global-region/
These disparities in internet access are crucial in understanding digital colonialism. Tech giants often target developing nations as new frontiers for growth, pushing their services in exchange for internet access. While companies such as Facebook and Google provide free or low-cost internet services to people in these regions, they also gather vast amounts of data that are essential for their business models. This data, mostly collected without adequate local regulation or oversight, further consolidates the power of Big Tech companies and places these countries at a disadvantage in terms of digital sovereignty.
Digital infrastructure provided by Big Tech companies can be seen as a form of modern-day colonisation, as data once extracted is often monetised or used to manipulate consumers through targeted advertisements, perpetuating economic dependency and reinforcing the dominance of these companies in the global markets. Local businesses and governments in developing countries may struggle to compete with these global entities, not only because of the technological edge they have but also because of their control over vast pools of data.
Beyond economic and data concerns, digital colonialism also influences political structures and cultural narratives in developing countries. As Big Tech companies expand into new markets, they bring with them not only products and services but also cultural norms and values. This can erode local traditions, languages, and ways of life, often in favour of a globalised, Westernised worldview.
Concept of Digital Sovereignty
The approaches to counter Big Tech’s influence vary. They could involve antitrust actions, transformative digital infrastructures, bold privacy legislations, the catalysis of domestic tech industries or clampdowns on online intermediaries, among other possibilities. At a multilateral level, the deliberations of the United Nations Open-Ended Working Group (OEWG ) on Information and Communications Technology around how Big Tech can be regulated with the concurrence of government and civil society could also be useful. What unites all these efforts is a desire for digital sovereignty- every country’s quest for control over its digital infrastructure, data, and citizen-facing technologies in the interest of its people. The concept of digital sovereignty has gained prominence as nations grow more responsive to the need to protect their digital spaces from foreign influence or manipulation. Digital sovereignty now encompasses a broad spectrum of approaches, each aiming to ensure the technological autonomy of states and their self-determination in the digital realm. This has led to a pushback by countries like China and Russia when it comes to asserting their digital sovereignty vis-à-vis Western Big Tech companies.
Lessons from the Nayara–Microsoft Standoff
In late July 2025, Microsoft suddenly and unilaterally withdrew its services from Nayara Energy, an India-registered company with majority Russian investment, following the imposition of fresh EU sanctions on Russian oil-related businesses. Nayara Energy said: “Microsoft is currently restricting Nayara Energy’s access to its data, proprietary tools, and products. Despite these being acquired under fully paid-up licenses”.
When a company gets registered and functions in India, India provides its sovereign cover. However, a foreign company like Microsoft blocking Nayara Energy’s Operations constitutes the antithesis of sovereignty. This sets a dangerous precedent, as what was done to Nayara can just as easily be done to another Indian company, and many Indian companies have significant business dealings with Russia.
Microsoft seems to have restored services, including email access, after Nayara took up this issue in the Delhi High Court. However, this does not necessarily mean good news because if this had been pursuant to US sanctions, which are getting progressively more arbitrary, Microsoft, as a US-headquartered company, would not have restored services. After all, Microsoft withdrew its services to the International Criminal Court (ICC), a body established through a global treaty, equally suddenly because the US ordered it to, unhappy over its verdicts on Israel.
Conclusion
India is a democracy with the rule of law, and it urgently needs a digital sovereignty policy (from which various laws can be derived in time). A systematic analysis thus has to be undertaken immediately for its formulation: identifying vulnerabilities and key areas of concern to plug gaps. Silicon chips, domestic data repositories, operating software, cloud computing, key application spaces, and fundamental AI models are some of the areas that must be included in the exercise. However, formulating a digital sovereignty policy takes considerable time.
In the meantime, to meet the Nayara Energy kind of contingency, companies like Microsoft can be ordered to provide essential digital infrastructures and services solely through their India-based subsidiaries. These would have to follow Indian laws and rules, and thus would not be subject to coercion under foreign sanctions; otherwise, legal action in India, including de-registration of their businesses, would follow. If any company cannot withstand pressure from the country where they are headquartered, they should be allowed to close operations in India after fulfilling their contractual and regulatory obligations.
All this, however, requires developing indigenous digital capabilities. After all, when Microsoft withdrew its services, Nayara turned to a domestic company for digital services. Digital sovereignty thus requires a parallel ‘digital industrialisation’ policy, with robust efforts for the rapid development of a domestic digital industry. Additionally, in democracies such as India, digital sovereignty has to be understood as the sovereignty of the people in control of their digital future, and not as the state in control of digital systems.
(For a detailed breakdown of the operational and security risks exposed by the Nayara–Microsoft standoff, read our companion analysis: “Cloud Sanctions and Energy Security.”)
References:
- Hendrickson, L. (2025). What is Data Sovereignty? Retrieved from https://www.identity.com/what-is-data-sovereignty/#:~:text=Data%20sovereignty%20refers%20to%20the%20principle%20that%20data,their%20data%20is%20collected%2C%20stored%2C%20processed%2C%20and%20shared.
- Kwet, M (2019). Digital Colonialism is threatening the Global South. Retrieved from https://www.researchgate.net/publication/387160844_Digital_Colonialism_Big_Tech’s_Grip_on_Sovereignty_in_a_Globalized_Era
- Levine, Y (2019). Surveillance Valley. ICON
- Purushottam, S, & Singh, P (2025). Need for a digital sovereignty policy. Retrieved from https://www.msn.com/en-in/lifestyle/whats-hot/need-for-a-digital-sovereignty-policy/ar-AA1K4v96
- Reyes, Z (2024). Digital Colonialism: Big Tech’s Grip on Sovereignty in a Globalized Era. Retrieved from https://www.researchgate.net/publication/387160844_Digital_Colonialism_Big_Tech’s_Grip_on_Sovereignty_in_a_Globalized_Era
- Samir, S, & Sarma, A (2025). Geo Technography: Mapping Power and Identity in the Digital Age. Penguin Viking
Dhruv Ashok is a PhD research scholar from Christ (Deemed to be University), Bangalore. He writes on current affairs and international politics. His areas of interest include conflict resolution and historical narratives. Views expressed are the author’s own.
Piyush Anand 
Raghvendra Tripathi 
Samarth Tripathi