Leading the global digital economy | Business Standard Column

Clipped from: https://www.business-standard.com/article/opinion/leading-the-global-digital-economy-122122701108_1.html

With its abundance of talent, wealth, and innovative capabilities, India’s digital ecosystem is a vital global asset that could be harnessed to solve major challenges worldwide

Jayant Sinha

India is ready to lead the world’s digital economy. We have the most number of users on the open internet. We have outstanding digital infrastructure, appropriate privacy protections and content regulation, robust competition law, and a vibrant start-up ecosystem. The US is the only other major economy that can match these strengths. China runs a closed system, and the European Union lacks the users and start-up ecosystem to match us. Our talented entrepreneurs should now scale up world-leading companies that can provide innovative new digital services to India and the world. As our IT/BPO services companies have shown, these world-leading digital companies will drive job creation and economic growth for decades to come.

India now has close to 700 million internet users; most of these users use mobile platforms to access the internet. The only other country that can match these many internet users is China. However, China’s internet has forked away from the world’s open internet and gone into a completely different direction. China has put in place elaborate firewalls to prevent Chinese users from accessing global internet services. Most global tech leaders, such as Meta and Google, have been locked out of the Chinese internet. Chinese internet users are subject to intense surveillance and censorship. On the other hand, India follows global standards and our digital companies are deeply interwoven into the global digital ecosystem.

India’s digital companies and internet users benefit from its top-class open digital infrastructure. We have the lowest prices for data usage and adequate bandwidth is now available even in the remotest areas of the country. The India Stack has revolutionised digital transactions, so that everyone can securely and conveniently utilise digital services. The India Stack includes Aadhaar (to authenticate digital identities), digital bank accounts (to access and deposit funds), and the Unified Payments Interface (to link together all bank accounts securely). Building on the India Stack, we have rolled out the Health Stack to enable electronic patient records and patient billing, the FASTag system for seamless highway tolling, and the DigiYatra nationwide passenger identification system. Collectively, this digital public infrastructure represents the most efficient and pervasive set of public digital goods available anywhere in the world.

The government is preparing two critical bills for personal data protection and content regulation. The Personal Data Protection Bill safeguards personal data and does not allow digital intermediaries to utilise data without the consent of the user. There are appropriate restrictions on shipping sensitive financial and user data outside the country. The Digital India Bill develops balanced policies for content and user services. Digital intermediaries will now have to take more responsibility for content on their platforms that leads to national security or public order violations.

India’s competition law is also being retooled to deal with digital markets. The Competition (Amendment) Bill, 2022, has introduced three important measures to deal with digital competition. First, a deal value threshold has been brought in to enable the Competition Commission of India to review acquisitions of technology companies that might already be very valuable, but have not grown their revenues or assets yet. Big Tech companies often make “killer” acquisitions to buy small technology companies to prevent them from becoming future competitors. These can now be reviewed. Second, the Bill ensures that the Commission can review transactions through which companies can exercise material influence over the competitive behaviour of other companies without having to take over full control. For instance, a technology company can force another company to follow certain technology standards by making just a small investment. Finally, the new Bill allows for negotiated settlements so that cases do not drag on for decades through appeals. This is particularly important in digital markets where technology evolves rapidly and markets are reshaped in a few years.

The Competition (Amendment) Bill, 2022, addresses anti-competitive practices after they have happened. The Standing Committee on Finance has just released a report where we make a case for preventing anti-competitive practices in digital markets before they can happen. In India and around the world, Big Tech companies have repeatedly and consistently followed anti-competitive practices. Unfortunately, it can take many years for the Competition Commission to investigate, prosecute, and enforce restrictions against such anti-competitive practices. During this time, Big Tech companies can irrevocably demolish their much smaller competitors and sustain their market leadership. Given these circumstances, it is necessary to identify companies that have market dominance and then restrain them from anti-competitive practices. We have recommended that such a law be implemented in India. The European Union has already passed such a law, and it is being considered in many other major economies, including the US and Japan.

Our leadership in the global digital ecosystem is strengthened by our start-up ecosystem. We now have the world’s third-largest number of start-ups, and they are supported by a flourishing set of venture capital firms, angel investors, law firms, HR companies, and other advisory resources. India has already gone through multiple innovation waves starting with the internet wave in the 1990s, the mobile innovation wave in the 2000s, the cloud wave in the 2010s, and now a mega-green wave that is just beginning. Through each innovation wave, we have generated more start-ups and more wealth, and are thus poised to keep driving digital transformation in India and the world.

India’s open digital ecosystem is a vital global asset. We have world-leading infrastructure, sophisticated privacy and data management, as well as a robust framework for free and fair digital competition. The future is going to be driven by artificial intelligence, data analysis, and cloud-based software services. With these technologies — and using our abundant talent, wealth, and innovative capabilities — our entrepreneurs should take on and solve major global challenges. The time has come for India to have its own trillion-dollar market cap digital leaders.The writer is a Lok Sabha MP from Hazaribagh, chairman of the Standing Committee on Finance, and member of the IT/Telecom Consultative Committee in Parliament. The views are personal

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