By Sarthak Hooda
The control of data is fast becoming as critical as the data itself. For Indian enterprises operating in an increasingly connected and complex world, data storage is no longer just an IT decision, it’s a strategic one. From rising cyber threats to changing laws, the question of where and how data is stored is now being asked in boardrooms, not just server rooms.
At the heart of this conversation is data sovereignty, the principle that data should be governed by the laws of the country where it’s collected. For businesses in India, this concept is becoming non-negotiable. Why? Because the balance between innovation, compliance, security, and national interest is delicate, local control over data helps maintain it.
India’s Regulatory Push, Security, Compliance, and Trust
India’s digital economy is booming. Government-led initiatives like Digital India have accelerated data generation across key sectors — telecom, public services, insurance, and even agriculture. With this surge in data, it’s no longer a question of whether regulations are needed, but how quickly they can adapt.
That’s where the Digital Personal Data Protection (DPDP) Act, 2023, comes in. It mandates that sensitive personal data must stay within Indian borders. It also puts the responsibility squarely on businesses, called data fiduciaries, to ensure secure and lawful handling.
Here’s the key shift: this isn’t just about ticking a compliance box anymore. It’s about protecting business continuity, customer relationships, and national interest. In fact, over 60 per cent of Indian enterprises are actively reassessing their data governance frameworks since the DPDP Act came into force, according to Nasscom.
Of course, regulations are only part of the story. Trust and security are front and centre too, especially for high-stakes sectors like healthcare, finance, and defence. Localised data storage significantly lowers the risks of breaches, unauthorised access, or foreign surveillance.
And there’s more. Local cloud providers tend to be better aligned with Indian laws. They understand the regional nuances. Their infrastructure is tailored for domestic use. That means more reliable uptime, stronger risk management, and better control overall.
More importantly, consumers are paying attention. A 2024 PwC India survey found that 72 per cent of Indian users prefer companies that store their data locally. For them, it’s about trust. It’s about knowing their information is protected under Indian law. For brands, that trust can translate into long-term loyalty.
Cost, Performance, and Market Trends
It’s not just about compliance or security. Local cloud also makes business sense. When data centres are close to users, performance improves. There’s less lag — something that matters a lot in real-time applications like fintech, online services, and smart manufacturing. Better performance equals better user experience.
Then there’s cost. Smaller, regional cloud providers often offer flexible pricing that fits Indian business models. This is especially valuable for SMEs, who need scalability without heavy overheads. The market is responding. According to IDC, India’s public cloud services market is on track to hit $17.8 billion by 2027. Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) are driving that growth.
But there’s a flip side. Infrastructure gaps remain. India still needs more data centres and more investment in cloud capacity. And let’s not forget talent. There’s a growing need for professionals skilled in cloud security, migration, and orchestration. Without them, scaling will be tough.
Migration, Investment, and the Road Ahead
Of course, switching to local cloud isn’t plug-and-play. Migration comes with its share of challenges — data portability, legacy compatibility, and orchestration complexity. Enterprises must plan carefully to avoid runtime disruptions.
Fortunately, help is on the way. The government and private sector are stepping up. For example, the Reserve Bank of India is launching a pilot in 2025 to offer affordable cloud storage for financial institutions. The goal? Reduce dependence on foreign hyperscalers and strengthen India’s own data infrastructure.
Embracing a Sovereign Digital Future
In conclusion, data sovereignty is reshaping the landscape of cloud computing in India. More enterprises are increasingly recognising the benefits of localised cloud solutions not only for regulatory compliance but also for enhanced security, performance and cost-effectiveness.
While challenges persist, the combined efforts of the government, private sector and international stakeholders are paving the way to create a resilient and sovereign digital infrastructure. As India continues to assert control over its digital assets, the emphasis on data sovereignty will remain a cornerstone of its digital strategy.
(The author is Founder & CEO, Neon Cloud)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.
