The 21st century is no longer defined by conventional military strength alone but by economic competitiveness and technological innovation. India’s approach recognises this shift and aligns with the broader global movement towards the Fifth Industrial Revolution. The transition from the Fourth to the Fifth Industrial Revolution marks a fundamental transformation in the global order. While the Fourth brought the internet, mobile connectivity, and platform economies, the Fifth builds upon these foundations through generative artificial intelligence, quantum computing, automation, and human-machine symbiosis.
For India, the digital revolution is a national imperative. According to a joint report published by the Internet and Mobile Association of India (IMAI) and Kantar IMRB (Kantar Indian Market Research Bureau), India is home to approximately 95.4 crore internet users as of March 2024, owing to the increase in e-commerce adoption, Over-The-Top (OTT) consumption, and the growing use of Indic languages.
As digital infrastructure expands, strategic digital governance becomes critical to secure its benefits and mitigate its risks. Through the Digital India programme and the JAM trinity (Jan Dhan, Aadhaar, and Mobile), India has revolutionised financial inclusion and public service delivery. Thanks to the success of the Unified Payments Interface (UPI) and other digital payment systems, over 80 percent of retail payments are now conducted digitally, according to the Financial Intelligence Unit. Beyond economic growth, this digital infrastructure has delivered national security dividends and played a significant role in disrupting terror financing networks, reducing reliance on cash-based transactions often exploited for illicit activities. The Ministry of Home Affairs has highlighted the decline in hawala-based and counterfeit currency-driven funding, particularly in regions affected by cross-border militancy.
Innovation and Global Engagement: India’s Rising Profile
In terms of sectoral innovation, India has seen tremendous growth across Edutech, Fintech, and Healthtech. Middle Eastern and African nations are increasingly turning to India for assistance in building their digital public infrastructure. For example, India has extended support to countries like Mauritius, Namibia, and Saudi Arabia in building digital financial systems, e-learning platforms, and telemedicine solutions. Investments in these sectors are rising rapidly. According to the Ministry of External Affairs, India’s development cooperation portfolio in technology-enabled services in Africa alone has crossed US$ 1.5 billion in recent years.
Middle Eastern and African nations are increasingly turning to India for assistance in building their digital public infrastructure. For example, India has extended support to countries like Mauritius, Namibia, and Saudi Arabia in building digital financial systems, e-learning platforms, and telemedicine solutions
A significant institutional anchor in this process is the New, Emerging, and Strategic Technologies (NEST) division of the Ministry of External Affairs. NEST represents India in global forums and actively promotes collaborations in critical and emerging technologies, reinforcing India’s commitment to digital sovereignty, ethical technology use, and technology sharing with partner countries. The government’s approach is not only about internal development but also about external engagement and uplifting digital capacities globally, especially within the Global South.
India’s digital rise is also reflected in its proactive international engagement. The country co-chaired the Paris AI Action Summit in February 2025 and hosted the Global Partnership on Artificial Intelligence (GPAI) Summit in July 2024. These engagements underscore India’s aspiration to co-shape the global digital order. Over 50 countries endorsed frameworks for ethical AI governance during the Paris Summit, with India playing a pivotal role in shaping these norms.
Domestically, the ecosystem is supported by institutions like the Ministry of Electronics and Information Technology (MeitY), the Telecom Regulatory Authority of India (TRAI), and the Indian Computer Emergency Response Team (CERT-In). A forthcoming Data Protection Authority will further strengthen this regulatory network. MeitY has reported a 30 percent increase in public and private investment in AI and semiconductor research since 2023. India’s national AI mission has launched over 40 innovation hubs across academic and private institutions to accelerate work on machine learning, language processing, and AI governance.
Silicon Valley of the East: India’s Semiconductor Ambitions
Another cornerstone of India’s technological journey is the development of a semiconductor ecosystem. Under the India Semiconductor Mission (ISM), the government is setting up semiconductor parks to reduce dependence on foreign chip imports and boost domestic production. India’s semiconductor ecosystem is witnessing significant momentum, with several high-profile collaborations underway. Between 2023-2025, India has approved and is developing as many as six semiconductor units. Key initiatives include Micron Technology’s investments, CG Power and Industrial Solutions Ltd’s partnership with Renesas and Stars, and Kaynes Semicon Pvt Ltd’s operations in Sanand, Gujarat. In Dholera, Tata Electronics Pvt Ltd has joined hands with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), while the Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) is setting up a facility in Morigaon, Assam. Additionally, a joint venture between HCL and Foxconn is establishing a semiconductor unit in Jewar, Greater Noida, Uttar Pradesh. These units aim to attract global chip manufacturers, create employment opportunities, and place India firmly on the semiconductor map. Such developments reflect a broader strategic push to position India as a credible node in the global semiconductor value chain.
India’s defence technology sector is also rapidly evolving. According to the Ministry of Defence’s Srijan portal, over 4,000 items have been indigenised for production by Indian companies. These range from avionics and missile components to radar systems and advanced sensors. Startups and MSMEs are playing an increasingly central role in defence innovation, aided by simplified licensing norms, reduced bureaucratic red tape, and financial incentives under the Innovations for Defence Excellence (iDEX) scheme.
However, technological advancement also brings new vulnerabilities. India’s digital infrastructure is still governed by the Information Technology Act of 2000, a framework inadequate for the challenges of modern cyber threats. While the Personal Data Protection Bill has seen progress, its delayed enactment leaves significant regulatory gaps
India’s Startup Revolution: Fuelling Economic Growth and Innovation
The larger shift toward a collaborative innovation model is visible in India’s startup ecosystem. With over 100 unicorns, 1.57 lakh certificates issued by the Department for Promotion of Industry and Internal Trade (DPIIT) for recognition of startups, and thousands of registered technology firms, India is the third largest startup ecosystem in the world. Government initiatives have significantly improved ease of doing business, with streamlined registration processes, tax incentives, and reduced compliance burdens. These reforms have not only spurred innovation but also attracted foreign investment and strengthened global confidence in India’s innovation capabilities.
India’s approach to technology is distinctly different from traditional techno-nationalism. While it prioritises domestic innovation and self-reliance, it simultaneously embraces knowledge sharing and global partnerships. Whether through Digital Public Infrastructure for Development (DPID), bilateral tech transfer agreements, or multilateral forums like GPAI, India has consistently advocated for inclusive and ethical technology deployment.
As part of the Viksit Bharat@2047 vision, India is laying the groundwork for becoming an emerging knowledge and innovation economy. The country’s rise in the Global Innovation Index (GII) to the 39th position in 2024, as reported by the World Intellectual Property Organization (WIPO), reflects this upward trajectory. With sustained investment in research and development, growing international collaborations, and a commitment to ethical and inclusive innovation, India is well-positioned to be a prominent player in the technology-driven global order.
Challenges Ahead
However, technological advancement also brings new vulnerabilities. India’s digital infrastructure is still governed by the Information Technology Act of 2000, a framework inadequate for the challenges of modern cyber threats. While the Personal Data Protection Bill has seen progress, its delayed enactment leaves significant regulatory gaps. Deepfake campaigns, ransomware attacks, and cyber intrusions targeting critical infrastructure such as hospitals and banking networks pose growing risks. Strengthening cyber resilience and data protection remains an urgent policy priority.
The writer focuses on contemporary Middle Eastern affairs and is the author of 'India and the Gulf: A Security Perspective'. She is also a subject matter expert at the Centre for Joint Warfare Studies.
