India befriends Big Tech as Trump tariffs knock on door, aided by a string of biz-friendly moves

Two people with direct knowledge of the matter said, requesting anonymity, that representatives of the US government have told their Indian counterparts during meetings held in the US over the past 90 days that they expect Big Tech to “keep receiving the Centre’s support” in the long run.

On Friday, India’s companies law court issued what has been seen as a favourable verdict on Google’s appeal against a ₹936.44 crore fine imposed by the competition commission 2022. The fine—for allegedly stifling innovation and promoting self-preferencing in the market—was slashed by nearly three-fourths.

Shortly before that in March, Pankaj Chaudhary, minister of state for finance, proposed to abolish a long-standing 6% ‘equalization levy’ charged on the earnings of foreign online advertisers that do not have a presence in India.

US majors Google and Meta had lobbied against this levy, claiming it was unfair “given Big Tech’s overall positive impact in India,” according to a senior executive who regularly represents these companies to the Indian government.

Several other such measures are seen to have tilted in favour of Big Tech in the past year.

For instance, a proposed Digital India Act, a draft of which, seen by Mint, was clearly modelled on Europe’s strong-on-regulation Digital Markets Act, has now been “shelved” indefinitely. The Act, among other things, sought to regulate issues of bias and harm in artificial intelligence—regulations that would have directly affected Big Tech.

Replies to Mint‘s questions to Meity were awaited at press time.

‘Deliberately slow’

In addition, progress on a Digital Competition Act, which sought to regulate large-scale technology corporations, has also gone slow, two senior officials told Mint—and the law is not expected imminently.

Isha Suri, research lead for competition law at think-tank Centre for Internet and Society, said that competition regulators, before ruling in favour of Big Tech, “must take cognizance of what certain laws and verdicts will do to smaller startups voicing up against the might of Big Tech.”

“The current approach will only soften India’s anti-competition environments,” Suri said.

However, a senior official said, “There is a consensus among ministries that it’s important to see if the existing legal frameworks within the Indian judiciary are sufficient to regulate technology at present. Discussions have taken place between officials at the Centre and their counterparts in the US, in terms of keeping India an open market for innovation—and for Big Tech to cater to. The current policy moves are set to ensure this.”

A second official added that progress “has admittedly been slow” in terms of technology laws and policies.

“It’s not just Trump—his impact is only a recent development. But the understanding within the government is to let the Digital Personal Data Protection (DPDP) Act, 2023—which is also India’s first law dedicated to data privacy and the handling of information on the internet—be implemented on-ground.

Once it is set rolling, the need for further regulation can be determined as we go. But, this will mean that we’ll wait for two or three years before the next possible significant tech regulation comes by—this largely favours Big Tech,” the second official said.

An important market

India, to be sure, has been a major area of interest to Big Tech. Meta Platforms Inc., which operates Facebook, Instagram and WhatsApp, among others, has its biggest user-bases for each of these platforms in India. For Google, its subsidiary YouTube—the world’s biggest video streaming platform—has its biggest user-base in India as well.

While India always had the volume, it is slowly raking in the numbers in terms of value as well. Over the past five fiscals, taking all Big Tech firms into account, India’s contribution to their global revenue has increased from 1% to around 3%. While still small, India’s current stature as the world’s fastest-growing large economy makes it an important market for the world’s top tech firms. It is also a valuable ally for the West in Asia, given China’s rising importance and dominance in semiconductors, AI and more.

US president Donald Trump is expected to unveil reciprocal trade tariffs on 2 April. The move may lead to specific trade tariffs being imposed on India as well. However, it is important to note that for the US, India stands as one of the world’s biggest exporters of tech talent and back-office IT outsourcing.

For the most part, though, the Centre has remained confident that Trump’s tariffs will not hurt India. On Friday, speaking at a media briefing following the union cabinet’s approval of a $2.7-billion electronics component manufacturing scheme, union IT minister Ashwini Vaishnaw said the tariffs “will be beneficial for India—not otherwise”, adding that further elaborations from the Centre will be offered later.

Inadvertent consequences?

“There is definitely a thinking within law and policymakers to take a middle-ground approach to regulating technology—rather than align India with Europe or any other geography. Overall, India’s progress on the technology policy front has certainly been slower than expected,” said a senior lawyer who works closely with the Centre, requesting anonymity.

“It is clear that the overall policy approach for technology in India does favour larger enterprises at the moment, rather than small companies and startups—although the DPDP Act does leave room open for exemptions to smaller firms. Whether India’s approach is in relation to Trump’s tariffs is questionable, but the overall sense is to evaluate if technology can be regulated with existing laws only, rather than proactively push for new laws,” the lawyer said.

Rohit Kumar, founding partner at policy think-tank The Quantum Hub, added that while a deliberate play to favour Big Tech may not be the intent, the current policy approach could favour large companies anyway.

“It’s not that the Centre does not have the intent to work on additional regulations in technology. NDA’s second tenure saw a lot of movement on tech policy, especially multiple amendments in the IT Rules—leading to policy uncertainty for businesses. The Centre is currently prioritising the implementation of the DPDP Act, and the roll out of the Telecommunications Act. As these are horizontal legislation, the industry and the tech ecosystem will need time to absorb these changes,” Kumar said.

Eventually, what is favouring Big Tech in India right now is India’s efforts to do what’s best for innovation—as policy advisors warn against repeating the mistakes of the past.

“The EU AI Act is an early attempt at regulating AI. While the EU stance is great for safety, it is not necessarily the best for innovation. Early regulation can disproportionately increase compliance burden for smaller, newer players vis-a-vis bigger players, thus creating an entry barrier and reducing competition. The Centre believes that existing legislation should suffice for the regulation of most AI use cases right now. There are of course some gaps in the regulatory framework which I think will be picked up in due course,” Kumar said.

“Some looming threats of US tariffs and backlash will undoubtedly be there. But in overall terms, India’s efforts to regulate technology is a phased effort, and policies are not necessarily being shelved,” he further said.