Sovereign cloud: Powering India’s push for secure, local AI

By Swastik Chakraborty

AI and GenAI have transformed the way individuals live, work, and consume entertainment. With widespread adoption across industries such as healthcare, BFSI, manufacturing, media and entertainment, automobile, energy, and utilities, discussions around the security and sovereignty of data—on which the efficacy of AI solutions depends—have become increasingly pertinent. In response to concerns related to the secure and compliant use of AI in India, there is a growing shift toward developing a sovereign cloud infrastructure.

This infrastructure ensures that AI applications are safely deployed within the country’s boundaries, thereby reinforcing the case for accelerated data localisation. Industry figures also underscore this trend, with revenue for sovereign cloud solutions in India projected to rise from USD 9.83 billion in 2025 to USD 102.70 billion by 2034, reflecting a CAGR of 29.8% over this period.

No wonder, experts believe that sovereign cloud is fast becoming a critical enabler for secure and compliant AI adoption in the country.

Understanding Sovereign Cloud in Context

A sovereign cloud is a computing environment specifically designed to ensure that all data—including applications, stored information, and data in transit—is hosted, processed, and governed entirely within a particular country or region. This approach fully complies with the region’s data sovereignty laws and regulatory requirements.

Multiple models can be employed to implement sovereign clouds, including dedicated cloud regions, government-owned clouds, and partner-managed clouds. These implementations offer various benefits, including enhanced security and compliance, improved control over data, reduced risk of data breaches, better support for data residency, and—when data is stored locally—potential improvements in latency and performance. Having introduced the concept, it is essential to examine the challenges posed by public cloud providers concerning digital sovereignty.

Risks of Public Cloud for Data Sovereignty

While cloud migration continues to gain traction, several challenges remain that governments and enterprises must scrutinise carefully.

Legal and regulatory compliance: Public cloud providers typically operate across multiple jurisdictions. This multi-region presence can make it challenging to maintain consistent compliance with the data protection and privacy regulations specific to each country or region, particularly as such regulations evolve rapidly.

Security and privacy risks: Dependence on third-party public cloud providers for managing sensitive data can expose organisations to serious security and privacy risks. A rigorous evaluation of the providers’ security frameworks and data handling practices is essential before deployment.

Limited control: Users of public cloud services often have little control over where their data is physically stored or how the underlying infrastructure is managed. This lack of visibility and control can pose challenges for organisations with strict data residency or sovereignty mandates.

Data localisation issues: Countries like India are increasingly enforcing strict regulations that require specific types of data to be stored within national borders. Public cloud providers may struggle to meet these data residency mandates, potentially leading to compliance risks and legal complications.

Vendor lock-in: Organisations may encounter difficulties when attempting to switch cloud providers, due to complex contractual obligations and technical hurdles. This can create dependency on a single provider, reducing overall flexibility and agility.

Inconsistent security standards: Security standards and practices can vary significantly across public cloud providers, making it challenging for organisations to ensure consistent security and compliance when operating in multi-cloud environments.

With a clearer understanding of the issues associated with public cloud providers, it becomes essential to examine the value that sovereign cloud adoption can deliver.

Strategic Value of Adopting Sovereign Cloud

Enterprises and government bodies in India are increasingly recognising the strategic importance of sovereign cloud solutions, seeking to derive significant value from their implementation across a range of dimensions.

One of the foremost benefits is increased control. In a rapidly digitising economy, Indian organisations are placing greater emphasis on maintaining complete authority over their data, not only to comply with regulatory mandates but also to ensure responsible governance. Sovereign cloud solutions provide the necessary framework to assert global data governance, empowering enterprises to manage and protect their data with transparency and security. This control extends across a vast network of stakeholders, including government agencies, partners, employees, and end users, enabling secure and trusted collaboration at scale.

Resilience is another key advantage. Recent global disruptions, such as the COVID-19 pandemic and ongoing geopolitical instability, have underscored the critical need for operational continuity. In India, sectors such as defence, telecommunications, banking, and energy must prioritise business resilience to protect national interests. Sovereign cloud infrastructure offers a foundational layer that strengthens the country’s ability to mitigate external risks. It provides organisations with complete visibility and command over their data, even when operations span across international or distributed environments.

Sovereign cloud adoption also contributes to brand equity. In a marketplace where trust and transparency increasingly shape consumer choices, organisations that prioritise sovereign data practices can enhance their brand image. Demonstrating a strong commitment to data protection and auditability helps build customer confidence, supports long-term retention, and positions the enterprise as a responsible and ethical custodian of information. This is particularly important for platforms and services with direct public and citizen engagement.

Furthermore, the sovereign cloud plays a vital role in enabling compliance with evolving regulatory frameworks. As India enforces more rigorous data protection

legislation, such as the Digital Personal Data Protection Act, there is a growing demand for infrastructure designed to meet national and sector-specific compliance requirements. Sovereign cloud solutions ensure data privacy, protect intellectual property, and allow enterprises to align with increasingly stringent mandates. In doing so, they support the secure processing of both institutional and citizen data in a globally interconnected and security-sensitive environment.

India’s Sovereign Cloud Future with AI

As India accelerates towards a digitally empowered future, the deployment of sovereign cloud infrastructure is becoming a strategic necessity for secure and compliant adoption of AI. By addressing the core challenges of data sovereignty, regulatory adherence, and cyber resilience, sovereign cloud solutions offer a vital mechanism for ensuring the ethical and lawful use of AI technologies in the Indian context.

The rapid growth of the sovereign cloud market reflects a broader national commitment to digital sovereignty, one that safeguards the country’s data while unlocking the full potential of AI innovation. This paradigm shift is not just about compliance with current legislation, such as the Digital Personal Data Protection Act; it positions India as a leader in secure, localised digital innovation. By doing so, it lays the groundwork for a future where data protection and technological progress are not opposing priorities but integrated objectives in building a trusted and transformative digital economy. 

The author is the Vice President of Netweb Technologies.