Tech in 2025: Trends that will hold — and fade away

📌 Digital policy: A patchwork of interventions in the absence of specialised legislation

As formal legislation lags, non-legislative inputs to tech governance will continue to shape the policy environment in 2025. The Parliamentary Standing Committee on Finance recommended the need for a specialised digital competition law in 2022, and saw its vision partially realised with the publication of the draft Digital Competition Bill in 2024. The Securities and Exchange Board of India recently published a draft proposal to regulate unregistered financial influencers. Judicial interventions as exemplified by the Bombay High Court’s ruling on the Fact-Check Unit or the Delhi High Court’s observation that the government should start working on regulating deepfakes, add to the policy matrix. In the absence of any meaningful progress on specialised tech legislation, we expect this trend to hold.

📌 Decoupling of regulation of online and traditional media

A converged regulatory framework was proposed for digital and traditional media through the Broadcasting Services (Regulation) Bill, 2024. This was met with resistance from diverse stakeholders leading to the withdrawal of the proposed framework and a shift in strategy. In the latter half of the year, the focus already moved towards a decoupled approach, exemplified by the Standing Committee’s scrutiny of OTT streaming content and the increasing imposition of specific obligations on OTT platforms by other ministries, such as those related to smoking, tobacco consumption, substance abuse and road safety.

📌 State of self-regulatory organisations

Self-regulatory organisations (SROs) must build internal capacities and invest in institution-building to avoid facing blowback in 2025. India has turned to self-regulation in industries like fintech and digital media to overcome state-capacity constraints. As concerns around user safety and responsible business practice become heightened, SROs will have their hands full. SROs must be proactive in pre-empting operational challenges and uplevel internal governance standards. Unless they are seen to be driving better standards in tech markets, the pendulum may swing back to micro-managerial managerial state intervention and prescriptive rules.

📌 DPI juggernaut, system design and operational challenges

The Reserve Bank of India is expected to scale pilots for digital public infrastructures (DPI) like the National Financial Information Registry (NFIR) and the Unified Lending Interface (ULI) in 2025. But the DPI story may face hurdles – around areas like data protection, user safety, information security and market competition — all of which are legacy challenges for this state-backed innovation ecosystem. NFIR and ULI will face a trial by fire in 2025 before they can successfully consolidate information and help streamline flows of credit across different classes of borrowers. Similarly, account aggregators and other intermediary DPIs will have to improve on privacy and security by design.

📌 Investment incentives may be linked to employment targets

As the tenure of several Production Linked Incentive (PLI) schemes approaches conclusion in the next two years, the government may axe several of them. PLIs have had mixed success in the tech space, with favourable outcomes in mobile manufacturing contrasting with underperformance in solar modules. Since employment generation has emerged as a key government priority post the 2024 general elections, it might become an eligibility prerequisite in subsequent iterations. This shift is already somewhat evident from the discussions between the Ministry of Electronics & IT and the electronics industry regarding the proposed PLI for electronic components.

📌 India is unlikely to introduce quota regimes for IT hardware

India has implemented a mix of tariff and non-tariff barriers (NTBs) over the past decade to support domestic manufacturing. These include import monitoring systems, quotas, and mandatory product certification schemes across sectors like coal, steel, paper, and IT hardware. While such measures aim to reduce dependency on foreign goods and bolster local capacities, they also create challenges for global companies operating in India. Regimes like the Import Monitoring System for IT hardware, initially expected to evolve into an import quota system, have been extended until December 31, 2025. Historically, the Trump administration has threatened retaliatory actions against tariffs imposed by India and is expected to do the same in his second tenure. If a quota regime materialises, Trump is likely to respond aggressively. In contrast, technical NTBs like quality control orders and certification schemes for telecom equipment, which were also heavily contested government actions in 2024, may not see equivalent escalation within the US despite their relevance to American corporations, given the limited bandwidth to reconcile technical intricacies during the first year of office.

📌 Internal tussles within global firms

India’s Preferential Market Access (PMA) policy was devised to boost domestic value addition (DVA) by prioritising market access for domestically manufactured goods in public procurement. In 2024, the Department for Promotion of Industry and Internal Trade revised the criteria for determining DVA, making compliance more stringent. Simultaneously, line ministries like the Department of Telecommunications introduced higher DVA thresholds for certain products. This trend is likely to gain momentum in 2025. Public procurement is a vital growth segment for foreign corporations and it influences their business strategies for investing in India. The evolving PMA policy, with its stricter local value-addition criteria, will complicate the business environment for foreign corporations. While our corporate leaders will champion the Indian market’s vast growth potential and advocate for increased local investment, their global counterparts may remain reluctant in 2025. Global companies prioritise per-dollar returns and may question the viability of substantial investments in India given the increasing regulatory hurdles and uncertainties stemming from frequent changes in the PMA policy.

📌 More competitive federalism in state tech policies

2025 will bring more state-level policies that provide financial incentives linked to local value and employment generation. States already have policies in place to lure revenue in sectors like IT/ITeS, cloud and film production. Some also have policies for segments like Global Capability Centres (GCCs) and Animation Visual Effects Gaming Comics – Extended Reality (AVGC-XR), and this enthusiasm to attract investments in the new economy will likely widen further in 2025. Fissures in Centre-state relations linked to fiscal devolution/resource sharing may also push Opposition-ruled states to become more aggressive in courting new economy industries. Only time will tell whether this translates to increased private investment momentum, but competitive federalism in the digital and technology space is a good outcome by itself.

📌 Telcos will double down on efforts to ‘level the playing field’ with OTT services

Telcos will reinforce calls for a level playing field with OTT services and adjacent industries in 2025. In 2024, telcos made several attempts to draw regulators’ attention towards their competition. Calls for imposing a Network Usage Fees on OTT services, pleas for regulatory scrutiny of Content Delivery Networks and arguments against spectrum allocation to satcom services are some examples. Telcos pushed the “same service, same rules” narratives with economic arguments around OTTs supposedly free-riding on their networks and unfair advantages that unlicensed actors enjoy. Since telcos achieved little success with these lines of attack, they may pivot in 2025.

The writers are policy experts at Koan Advisory