India’s digital landscape thrives on its young, tech-savvy population. There are over 650 million smartphone users, and internet subscribers have surpassed 950 million. This widespread adoption is driving growth in sectors like eCommerce, digital payments, and financial tech (fintech), while significant investments are being made in AI, cloud computing, and blockchain technologies. Complementing this digital growth are the government’s initiatives such as Digital India, Skill India, and the National Digital Communication Policy (NDCP) of 2018, all of which aim to build robust digital infrastructure and expand broadband access across the country. With the National Data Governance Framework and the Production Linked Incentive (PLI) Schemes, India is fueling innovation in electronics, smartphones, and semiconductors. The National Artificial Intelligence Mission is taking a step further, aiming to establish India as a global Artificial intelligence (AI) powerhouse.
The telecom sector is advancing swiftly marked by ongoing 4G expansion and the gradual rollout of 5G networks, currently in the early stages of deployment in key cities. While 4G has significantly improved connectivity nationwide, 5G is expected to further enhance network performance and enable advanced applications such as the Internet of Things (IoT) and smart cities. Expansion beyond urban centers is ongoing, with major domestic telecom providers—Reliance Jio, Airtel, and Vodafone Idea—leading efforts. India’s smart cities initiative is also fueling demand for IoT and smart infrastructure, creating strong opportunities for U.S. exporters of advanced telecom and digital technologies.
The digital economy is projected to reach a trillion-dollar valuation in the coming years, driven by expanding internet access, improved digital infrastructure, and a focus on rural areas. India enacted the Digital Personal Data Protection Act in August 2023, and associated implementation rules were notified in November 2025. Industry feedback suggests that while the law establishes a framework for data privacy, its compliance requirements and operational complexities pose challenges for companies dependent on cross‑border data flows.
India’s digital transformation is powered by its unique public infrastructure, notably the Unified Payments Interface (UPI), which has revolutionized real-time, low-cost, and interoperable payments at scale. This creates strong export opportunities for U.S. firms in cloud services and digital finance solutions. Simultaneously, growth in India’s health tech and fintech sectors—driven by initiatives like Ayushman Bharat and the National Digital Health Mission—opens the door for U.S. exports in digital health tools, medical devices, and secure data systems.
Market Challenges
Regulatory Environment
India has a complex and generally challenging regulatory environment. New regulations and industry promotion schemes keep evolving at the national level, and they affect foreign business competitiveness.
In August 2023, the DPDPA became law, aiming to protect the privacy of Indian citizens and safeguard personal data in the context of a globally interconnected digital economy. It sets obligations for entities that process personal data, including with an emphasis on consent requirements to process and use personal data, data breach notification requirements, provisions to establish a Data Protection Board, individuals providing consent for data use and provide safeguards for children’s data. DPDPA allows cross-border data transfers and grants the government power to identify specific countries to which cross-border data transfers will not be permitted. The Government of India has not yet specified the countries to which such transfers will be restricted.
The DPDPA clarifies that if any other Indian law provides for a higher degree of regulation on personal data transfers outside India, then that law will continue to apply. This could prioritize provisions in existing sectoral laws that limit cross border data transfers or impose data localization requirements, such as the Reserve Bank of India’s (the official regulator for the banking and finance sectors) data localization mandate. The DPDPA defines the responsibilities and domain of the new upcoming regulatory body, the Data Protection Board, which will set financial penalties for data misuse and would create a grievance management system and outline exemptions to following the DPDPA’s requirements. The Government of India finalized and published the Digital Personal Data Protection (DPDP) Rules that provide additional details, compliance requirements, and regulations for the implementation of the DPDPA. The DPDP Rules were finalized and entered into force on November 13, 2025.
Opportunities in the advanced wireless technology market in India are also pending the Department of Telecommunications’ decision to open spectrum capacity in the 6 Gigahertz (GHz) spectrum band to next-generation license-exempt technologies such as Wi-Fi. The newest standards of Wi-Fi (Wi-Fi 6e and 7) are designed to utilize the 6 GHz spectrum band. The latest wireless networking equipment and devices are unable to operate in India until the 6 GHz band is opened to Wi-Fi technologies.
With regards to eCommerce, in 2019, the Indian government released an initial draft national eCommerce policy to regulate the sector. The policy focused on cross border data flows, intellectual property, and competition. The Indian government is working on an updated eCommerce policy draft and has stated that it plans to release it once it is ready. The Indian government allows 100% FDI in B2B eCommerce firms and 100% FDI in B2C eCommerce under the “automatic route,” which does not require prior approval from the RBI or the central government. Though the Indian government allows 100% FDI in the eCommerce marketplace model (ECM), it is not allowed in the inventory-based model. Under the ECM, vendors utilize online portals to sell their products in the eCommerce marketplace, but under the inventory-based model they both own and sell products in the eCommerce marketplace.
India has the highest average applied tariff (17%) of any G20 country, and some of the highest bound tariff rates among WTO members. U.S companies interested in doing business in India, should be aware of non-transparent or unpredictable regulations and tariffs. Likewise, U.S. goods and services in some sectors have limited access to the market. Indian companies and consumers are quite price sensitive. U.S. companies must evaluate whether they can sell at prices that Indians are willing to pay and may need to adjust their pricing models accordingly. Customs duties and tax regimes are also important factors in the Indian market, and U.S. companies should consider consulting experts regarding tax issues, data localization, and broader compliance requirements in India. Over the past eight years, India has applied customs duties ranging from 2.5 to 20% on imported digital products to protect domestic suppliers and to bolster indigenous production. The various duties on digital products are in violation of the 1996 World Trade Organization (WTO) Information Technology Agreement, which commits signatories to eliminate duties on identified digital products.
India is not a party to the WTO Agreement on Government Procurement and does not have a free trade agreement with the United States. Indian government procurement accounts for nearly 30% of India’s $3 trillion GDP, and in June 2020 the Indian government instituted guidelines stating that no procurements under approximately $27 million could be globally tendered unless the nodal agency could demonstrate that the product or service is unavailable in the Indian domestic market. The Public Procurement Order (Preference to Make in India) gives priority to companies with products containing 50% or more local content. Products with less than 20% local content are categorized as “non-local suppliers” and cannot participate in Indian government tenders.
To improve the transparency of decision making in public procurement processes and to reduce malpractice, in August 2016 the Ministry of Commerce and Industry set up an online marketplace for public procurement, known as the Government e-Marketplace (GEM). The Indian government has integrated its Central Public Procurement Portal with GEM to improve buying and selling processes for ministries, departments, and other Indian government agencies. Many of India’s public works projects are financed through borrowing from multilateral development banks. When foreign financing is involved, principal government procurement agencies tend to follow multilateral development bank requirements for international tenders as well. The GEM portal has largely supplanted human interaction for vendor registration, order placement, and payment processing. India’s central and state governments collectively procure goods and services worth $131.89 billion annually through GEM. Currently, over 80,000 sellers are registered on the portal, selling over 11,209 product categories.
Strategic planning, due diligence, consistent follow-up, patience, and commitment are prerequisites for doing business successfully in India. The Indian market necessitates multiple marketing efforts that address differing regional opportunities, standards, languages, cultural differences, and levels of economic development. Penetrating India’s market requires careful analysis of consumer preferences, existing sales channels, and changes in distribution and marketing practices. India is a face-to-face society, and in-person meetings are typically required before formalization of work partnerships or agreements.
Digital Trade Barriers
India is estimated to have over 800 million internet users. However, it continues to have the largest number of unconnected people that includes women, rural population, differently abled, children, and the aged. According to Connect, Harness, Innovate, Protect and Sustain (CHIPS) user score, in terms of level of digitalization of users in 2024, India ranked 12th among the G20 nations. This is attributed to low per capita income, as there is a direct correlation between the consumption of digital goods and services and per capita income of a country. Additionally, the fixed broadband internet service quality in India does not match up to other countries in the G20 group. While all these pose general challenges, there are other barriers that continue to hamper digital trade in India. This includes:
Data Localization and Cross Border Data flows: In addition to the Reserve Bank of India’s 2018 requirement that payment system data be stored on servers within India, India’s data protection framework has evolved with the Digital Personal Data Protection Act (DPDP Act), enacted in August 2023 and operationalized through the DPDP Rules notified in November 2025. The Act permits cross‑border transfers of personal data by default but also gives the government broad discretion to restrict transfers to specific countries or categories of data, creating uncertainty for businesses reliant on global data flows. Sector‑specific data localization mandates particularly in financial services and payments continue to operate independently and can impose hard residency requirements. U.S. trade policy analysis, including the 2026 National Trade Estimate (NTE) report, notes that the DPDP Act and draft rules empower the government to impose data localization requirements and restrict data exports without clear criteria, posing compliance challenges for global firms.
Market Share Limitation: A circular issued by the state-owned National Payments Corporation of India (NPCI) in November 2020 restricted a market share limitation of 30%, measured in number of transactions, for foreign electronic payment service suppliers processing online payments through India’s UPI. However, per a new circular issued by NPCI on December 31, 2024, this mandatory volume cap compliance has been put on temporary hold until December 31, 2026.
Restrictive IT Rules: The Indian Government’s information technology rules (IT Rules) of 2021, updated in June 2023, impose personal criminal liability on individual employees of significant social media and online gaming intermediaries if they do not comply with the rules. The IT Rules also include imposition of impractical compliance deadlines and take-down protocols. Since 2021, U.S. firms have been subject to an increasing number of takedown requests for content and user accounts related to sensitive subjects.
Restrictions on Digital Content Aggregation: The Telecommunications Regulatory Authority of India (TRAI) regulations on content aggregation and distribution do not allow bundling of channels or certain types of distribution partnerships, causing difficulties for small and international content providers.
Mandatory Domestic Proprietary QR Code Standard: The adoption of a national common mobility card (NCMC) mandates a domestic proprietary QR code standard, disadvantaging foreign suppliers. India has not yet shared the domestic quick Specification for Payment Application of RuPay Chip (qSPARC) card standard, effectively prohibiting foreign firms from participating in the roll-out of the NCMC.
Satellite Communication: India’s Ministry of Information and Broadcasting maintains a preference for Indian satellites to provide capacity for direct-to-home (DTH) subscription television services. In practice, DTH licenses have not been permitted to contract directly with foreign satellite operators and have encountered procedural delays when they have sought to do so. Rather, DTH licensees must procure satellite capacity through Antrix, the commercial arm of the Indian Space Research Organization (ISRO), which in turn only permits foreign procurements if it does not have available capacity on Indian satellites. When ISRO does permit the use of foreign satellite capacity, the foreign satellite operator must sell the capacity to ISRO, which in turn resells the capacity to the end-user with a surcharge. The United States continues to encourage India to adopt an “open skies” satellite policy to allow consumers the flexibility to select the satellite capacity provider that best suits their business requirements and to promote market access for foreign satellite service providers.
Import Curbs on Laptops and IT Hardware: In August 2023, the Indian government announced restriction on imports of certain digital products, including laptops, tablets, and servers classified under the harmonized system (HS) heading 8471. The government issued a revised circular in December 2024 mandating all companies importing IT hardware under HS code 8471 during CY2025 to register on the website of Directorate General of Foreign Trade (DGFT), furnishing details of the value and volume of their imports, domestic manufacturing activities, and disclosing the country of origin of their imports.
Domestic Production Requirement: In April 2020, the Ministry of Electronics and Information Technology (MeitY) issued a notification requiring entities to procure cellular mobile phones only from local suppliers that meet the domestic production requirement of 50%, irrespective of purchase value.
Digital Trade Opportunities
Cross-Sector Enabling Technologies
Digital technologies are instrumental in boosting productivity, efficiency, and functionality across various industries. For U.S. companies, aligning these technologies and understanding the supportive policies and ongoing projects in India can unlock substantial business opportunities.
Communications and Networking Technologies: India’s progress in 5G technologies present substantial opportunities for U.S. companies specializing in network infrastructure, equipment, and services. The National Digital Communications Policy (NDCP) 2018 supports the deployment of 5G, including Open RAN-based technologies, leading to significant investments in digital infrastructure. The government of India should also soon decide on opening the 6 GHz spectrum band to the latest generations of Wi-Fi-enabled equipment and devices. Analysts estimate opening the entire 6 GHz band to Wi-Fi could support an additional $157 billion in market opportunities for technology suppliers in India. U.S. companies can capitalize on these developments by providing cutting-edge technologies and services, meeting the increasing demand for high-speed broadband, and contributing to the expansion of India’s digital capabilities.
AI, Quantum Technologies, and Advanced Computing: India’s push to become a global leader in AI presents valuable opportunities for U.S. firms to offer AI solutions, consulting services, and engage in R&D collaborations. The IndiaAI mission, an Indian Government-led initiative to catalyze AI innovation and adoption across sectors, aims to develop a robust AI infrastructure, including over 10,000 Graphics Processing Units (GPUs) and indigenous AI models U.S. companies can participate in initiatives like AI4Bharat and Digital India AI Research Labs to collaborate on cutting-edge AI projects and leverage India’s growing AI ecosystem for business expansion.
Simultaneously, India’s growing digital infrastructure offers significant opportunities for U.S. companies specializing in advanced computing, particularly in cloud and quantum computing. As businesses and government agencies in India migrate to cloud solutions, U.S. firms can provide essential cloud infrastructure, platforms, and services, further supported by the Digital India Program’s focus on enhancing digital infrastructure.
In quantum computing, India’s National Quantum Mission presents strategic opportunities for U.S. companies to export advanced technologies, equipment, and services while engaging in collaborative R&D. As India builds out its quantum ecosystem—including initiatives at Indian Institute of Science (IISc) Bengaluru, Indian Institute of Technology (IIT) Madras, and the Department of Science and Technology—U.S. firms can provide critical hardware, software, and training solutions to support India’s ambitions. These initiatives create a growing demand for American quantum technologies and expertise, positioning U.S. companies to lead in shaping standards, building capacity, and delivering cutting-edge solutions to a rapidly expanding market.
Advanced and Networked Sensing and Signature Management: India’s IoT sector is poised for rapid growth, with projections presenting lucrative opportunities for U.S. companies offering specialized IoT solutions and sensor technologies. The Smart Cities Mission in India, with over 8,000 multi-sectoral projects, provides an ideal platform for deploying advanced IoT technologies in urban management, creating numerous avenues for U.S. firms to export their hardware, software and services in this sector.
In the field of signature management, the DPDPA introduces stringent data protection requirements, driving the demand for advanced technologies to secure data transmission and enhance cyber defense. U.S. cybersecurity companies can engage in global initiatives aimed at improving data protection and safeguarding critical infrastructure, addressing the growing need for sophisticated security solutions.
Human-Machine Interfaces: The increasing adoption of Augmented Reality (AR) and Virtual Reality (VR) in education, training, and entertainment presents significant opportunities for U.S. companies specializing in these technologies. India’s National Education Policy (NEP) 2020 supports the integration of AR/VR technologies into educational settings. As AR/VR becomes increasingly prevalent in educational and professional environments, U.S. firms have a prime opportunity to supply AR/VR hardware and content, capitalizing on India’s commitment to modernizing its education system and expanding digital learning resources. Additionally, the growing interest in health and fitness wearables creates opportunities for U.S. companies to innovate and collaborate on wearable health technology, please refer to the best prospects in Healthcare and Lifesciences for more information on possible licensing and regulatory requirements.
Other Technologies: U.S. companies can also find opportunities within India’s ICT sector, which is supported by the National Information Technology Policy which promotes IT infrastructure development. There are opportunities in expanding fiber optic networks and improving internet connectivity, where U.S. firms can contribute to projects focused on increasing broadband access.
Specific Industry Sub-sectors:
Quantum Technologies
Research and Development (R&D): India is investing heavily in quantum computing research to foster domestic expertise and innovation. Collaborative R&D projects with global tech firms can open new trade channels.
Quantum Cryptography: As quantum technologies advance, the demand for quantum-safe encryption methods is increasing. Companies offering quantum cryptography solutions have significant market potential in India.
Skill Development: With a focus on education in quantum sciences, there is a growing demand for training programs and platforms to improve the workforce in quantum technologies.
Financial Technologies (Fintech)
Digital Payments: India’s fintech sector is a global leader, driven by digital payments and the Unified Payments Interface (UPI). The digital economy is expected to contribute to one-fifth of GDP by 2030. Companies offering advanced payment solutions, cross-border platforms, and blockchain-based financial services can tap into this market.
Lending and Credit Scoring: The rise of digital lending platforms creates opportunities for companies specializing in AI-driven credit scoring and risk assessment tools.
Cybersecurity
Data Protection: With increased digital transactions and cloud services, data protection is critical. Companies providing solutions for data encryption, threat detection, and incident response have substantial opportunities.
Cybersecurity-as-a-Service: Indian Small and Medium-sized Enterprise (SMEs) are increasingly outsourcing their cybersecurity needs, creating opportunities for global managed security service providers.
Compliance Solutions: New regulations like the DPDP Act create a growing need for tools and services ensuring compliance.
Internet of Things (IoT)
Smart Cities: The Smart Cities Mission drives IoT adoption, offering opportunities for companies providing smart infrastructure, traffic management, and energy efficiency solutions.
Agritech: IoT in agriculture focuses on precision farming, supply chain management, and monitoring solutions. Companies specializing in IoT for agriculture can benefit from partnerships and market entry.
Healthcare: The rise of IoT in healthcare, particularly remote monitoring and telemedicine, presents opportunities for companies with expertise in IoT-based healthcare solutions.
Digital Economy Trade Events
Electronica India 2026 (April 8-10, 2026, Greater Noida and September 16-18, 2026, Bengaluru) - Electronica India is South Asia’s biggest trade fair for electronics components, applications, solutions and systems. This fair showcase products such as semiconductors, embedded systems, displays and LEDs, micro and NanoSystems, sensor technology, test and measurement, PCB and other passive components.
India Electronics Week (May 13-15, 2026, Bengaluru) – India Electronics Week (IEW) is the country’s premier event for electronic products, with a strong focus on research & development and new product development. IEW offers specialized conference tracks for R&D and new product development professionals in semiconductors, PCBs, circuits, and complete embedded systems.
Bengaluru Tech Summit (BTS) 2026 (November 17-19, 2026, Bengaluru) – The 29th edition of BTS 2026 will take place from November 17-19, 2026, at the Bangalore International Exhibition Center (BIEC) under the theme ‘AI & Beyond’. This year’s summit not only brings together industry leaders, researchers, startups, investors and policymakers from around the world and spotlights the transformative power of artificial intelligence, it will also explore the broader frontier of emerging technologies from deep tech and advanced digital ecosystems to breakthrough scientific and industrial innovation that are shaping the next era of global progress.
2026 Global Technology Summit (Date TBD, New Delhi) – Co-hosted by Carnegie India and the Ministry of External Affairs, Government of India, this summit will focus on the transformative potential of critical and emerging technologies. The theme, Sambhavna (possibilities), will highlight opportunities in technology partnerships, AI, cybersecurity, data governance, and digital public infrastructure to drive economic growth and shape international relations.