Introduction
India is now the world’s largest digital marketplace by users, with more than 850 million internet subscribers and 1.2 billion mobile connections (TRAI, 2024). This scale has made the country indispensable to the business models of the world’s largest technology companies. India accounts for 535 million WhatsApp users (23% of the global total), more than 500 million YouTube users (~20%), around 824 million Gmail accounts (~45%), 380 million Instagram users (17%), and 373 million Facebook users (17%) (Statista, 2024; Datareportal, 2024). Amazon Web Services already derives over 10% of its Asia-Pacific cloud revenues from India, with the domestic cloud market expected to reach USD 17.8 billion by 2027 (IDC, 2024).
These numbers illustrate how Indian consumers underpin the user scale and revenue growth on which trillion-dollar U.S. valuations rest. Yet the financial returns accrue overwhelmingly to the United States, with most Indian user data hosted offshore in American-controlled data centres.
This imbalance raises questions of digital sovereignty and global economic equity. What would happen if India sought to monetise its user base more directly, either through a levy on foreign platforms or through mandatory data localisation? What if Indian policymakers created the environment for domestic platforms to emerge as competitors to U.S. technology firms? This article considers these scenarios and their implications for India, U.S. technology valuations, and the broader global digital order.
India as the Backbone of U.S. Tech Growth
The commercial models of U.S. technology firms are based on scale. Advertising revenues, data analytics, and product development all depend on large and active user communities. In this respect, Indian users are central.
When Meta crossed the USD 1 trillion market capitalisation threshold in 2021, analysts cited emerging market growth—particularly in India—as a decisive factor (Financial Times, 2021). Yet the average revenue per user (ARPU) in India is just $3.43 per quarter for Meta, compared with $56.44 in the United States and Canada (Statista, 2024). This disparity illustrates the paradox: Indian users drive the scale underpinning valuations, but the monetisation of that scale is realised elsewhere.
At present, India functions as a low revenue but high-volume market. The contribution is systemic rather than marginal: without India’s hundreds of millions of active users, the valuation multiples of U.S. firms would look materially weaker.
Scenario 1: Monetising Indian Users through Data Localisation and User Levies
One possible path is the imposition of mandatory local data storage combined with a levy on foreign platforms monetising Indian user data.
India has already moved in this direction. The Digital Personal Data Protection Act (2023) requires sensitive personal data to be processed in India, with strict conditions for cross-border transfers (Government of India, 2023). The Reserve Bank of India has separately required payment system operators to store payments data locally since 2018 (RBI, 2018). These measures have catalysed significant investment in domestic data centres. Market reports suggest India’s data-centre capacity could double by 2026, reaching almost 2 gigawatts as localisation rules drive infrastructure expansion (Cushman & Wakefield, 2023).
If India were to formalise a User Revenue Service (URS), foreign platforms could be obliged to share a percentage of revenues attributable to Indian users. To illustrate, if Meta were required to repatriate even 5 per cent of estimated Indian user-related revenues (roughly $2–3 billion annually), that sum could be channelled into building digital infrastructure, supporting research and development, and financing skill development (Statista, 2024).
For U.S. firms, compliance costs would rise due to both data localisation and revenue-sharing requirements. Margins could narrow, and in turn, market valuations may need to be repriced to account for new liabilities. However, there are also risks for India. Overly onerous rules could disincentivise investment, limit cross-border data flows essential for global trade and invite retaliatory measures from the United States or other jurisdictions (Carnegie Endowment, 2021). The policy challenge is to ensure fairer value capture without slipping into digital protectionism.
Scenario 2: Building Domestic Alternatives
The second scenario considers the development of indigenous digital platforms capable of competing with U.S. incumbents. India already has experience in creating robust domestic digital infrastructure. The Aadhaar biometric identity system covers over 1.3 billion people, while the Unified Payments Interface (UPI) now processes more than 10 billion transactions monthly, surpassing Visa’s global volumes in 2023 (NPCI, 2024). These Digital Public Infrastructures (DPIs) illustrate India’s capacity to deliver scalable, inclusive platforms at national scale.
By extending this model into consumer-facing applications, India could nurture alternatives to global incumbents. The Open Network for Digital Commerce (ONDC) aims to create an open protocol for e-commerce, challenging the dominance of Amazon and Flipkart. A well-capitalised innovation fund such as the proposed INR 25,000 crore (c. $2.5 billion) for AI and advanced computing could similarly incubate competitive social media, cloud, or AI platforms (MeitY, 2024).
If successful, such firms would not only serve domestic markets but also export services across the Global South, where affordability and inclusivity are paramount. The geopolitical implication would be a multipolar digital ecosystem, with India positioned as a third pole alongside the U.S. and China. For U.S. technology companies, this would mean intensified competition in markets they currently dominate. For India, it would translate into higher domestic retention of value, enhanced sovereignty over data, and leadership in shaping global standards.
Implications for U.S.–India Relations and Global Digital Governance
Both scenarios carry implications beyond economics.
For the United States, recognising India’s centrality to technology valuations is becoming unavoidable. Digital trade is now a recurring issue in the U.S.–India Trade Policy Forum, and American policymakers must consider how to accommodate Indian demands for greater equity without triggering fragmentation of the global digital economy (USTR, 2023).
For India, digital leverage can translate into negotiating power. By coordinating with other large digital markets, such as Indonesia (220m internet users), Brazil (180m), and Nigeria (130m)—India could spearhead a “Digital Users’ Equity Charter” at the G20 or United Nations Internet Governance Forum (Datareportal, 2024). Such a coalition would echo earlier efforts of resource-rich countries to demand fairer terms of trade in commodities. Yet India must calibrate carefully: global investors remain essential for capital-intensive infrastructure, and excessive regulation could slow innovation domestically.
Globally, the contest between openness and control in digital governance will intensify. China has demonstrated a model of strict state sovereignty over data and platforms. The United States has so far favoured open flows under U.S. corporate leadership. India has the opportunity to define a middle path: open but equitable, market-oriented but sovereign. The choices made in New Delhi over the next decade will therefore have consequences far beyond national borders.
Conclusion
India’s digital ecosystem is at an inflection point. U.S. technology valuations depend heavily on Indian users, whose activity underpins scale and revenue growth. Yet value capture remains externalised. If India chooses to monetise this contribution through data localisation, levies, or support for domestic alternatives, the consequences will reverberate through boardrooms in Silicon Valley and policy circles in Washington.
The decisions ahead are not straightforward. A poorly designed regime could deter investment and fragment global trade. But a carefully calibrated framework could ensure that India’s digital contribution is recognised and rewarded, while preserving the benefits of integration into global networks.
For policymakers and business leaders, the central question is no longer whether India matters to the digital economy. It is how India will choose to exercise that leverage. The answer will help shape not only the trajectory of Indian development but also the global balance of digital power in the 21st century.
References
Carnegie Endowment for International Peace, How Would Data Localisation Benefit India?, Washington, DC, 2021.
Cushman & Wakefield, India Data Centre Market Overview 2023, New Delhi, 2023.
Datareportal, Digital 2024: Global Overview Report, Singapore, 2024.
Financial Times, ‘Meta’s Market Valuation Passes $1tn on Emerging Market Growth’, Financial Times, 29 June 2021.
Government of India, Digital Personal Data Protection Act, New Delhi, 2023.
IDC, India Public Cloud Services Forecast 2023–2027, Gurgaon, 2024.
Meta, Quarterly Earnings Report, Menlo Park, 2024.
Ministry of Electronics and Information Technology (MeitY), AI and Emerging Technology Innovation Fund Proposal, New Delhi, 2024.
National Payments Corporation of India (NPCI), UPI Monthly Statistics Report, Mumbai, 2024.
Reserve Bank of India (RBI), Circular on Storage of Payment System Data, New Delhi, 2018.
Statista, WhatsApp: Number of Users by Country 2025, Hamburg, 2025.
Statista, Average Revenue Per User (ARPU) of Meta Platforms Worldwide 2024, Hamburg, 2024.
United States Trade Representative (USTR), U.S.–India Trade Policy Forum Joint Statement, Washington, DC, 2023.
