Digital Public Infrastructures (DPIs) gained widespread global publicity during India’s G20 Presidency, with the G20 Digital Economy Ministers agreeing to define DPI as “a set of shared digital systems that should be secure and interoperable, and can be built on open standards and specifications to deliver and provide equitable access to public and / or private services at societal scale and are governed by applicable legal frameworks and enabling rules to drive development, inclusion, innovation, trust, and competition and respect human rights and fundamental freedoms.” This pivotal moment in India’s DPI diplomacy was a consequence of a large-scale mobilisation effort by the Indian government and the G20 Digital Economy Working Group (DEWG) knowledge partners including the United Nations Development Programme (UNDP) and the World Bank, among others, to position its DPI initiatives as exemplar projects.
In the Indian context, the origins of DPIs can be traced back to the development of the “India Stack” ecosystem, encapsulating a cluster of digital solutions centred on the use of technology for developing solutions at population scale (systems serving entire populations or very large portions of society). Originally developed by an industry think-tank Indian Software Industry Roundtable (iSPIRT), it is used to describe an ecosystem of technologies relying on the use of application programming interfaces (APIs) to achieve paperless, cashless, and consent-based transactions. This led to the development of platforms such as the Unified Payments Interface (UPI) for payments, Open Network for Digital Commerce (ONDC) for digital commerce, and the Data Empowerment and Protection Architecture (DEPA) for consent-based data sharing, among others. Hailed as “India’s most significant contribution to the digital world” by the Ministry of Electronics and Information Technology (MeitY) in 2022, it paved the way for the private sector to become intertwined with public functions.
Today, DPIs have emerged as a priority for several governments, leading to a massive inflow of funds and large-scale advocacy campaigns such as the “50 in 5”, aiming to deploy DPI in 50 new countries by 2028. This initiative is supported by prominent international organisations including the Gates Foundation, the UNDP, Co-Develop, the Centre for Digital Public Infrastructure and the Digital Public Goods Alliance. Though many countries today are moving towards rapid development and deployment of DPI, their goals are divergent, with national sovereignty and competition being two of several competing motivations. Eaves and Vasconcellos classify these motivations into the following five types: (i) Fiscal resilience, (ii) Public services, (iii) Economic development, (iv) National sovereignty, and (v) Competition and rent extraction.
This essay interrogates the claims endorsing DPIs as a viable alternative to concentrated digital ecosystems and an instrument to further national sovereignty goals, particularly from the vantage point of India. Though these two rationales are mainstream now, it is fair to state that they did not underpin the initial development and deployment of India’s DPI architecture. By the government’s own account, the primary objective initially was direct benefit transfer.
Even though the precise shift in motivations cannot be attributed to a singular moment, its origins can be traced back to 2016 when UPI was first launched in India by the National Payments Corporation of India (NPCI). This ushered in an era of the private sector building applications and services on top of the shared digital infrastructure established through Aadhaar, the “digital rails.” In doing so, it contributed to what Dattani refers to as “governtrepreneurism”, embedding corporate interests into governance, reducing populations to subjects or customers of the corporate-state.
According to the Reserve Bank of India’s (RBI) Vision Statement in 2016, the stated rationale behind UPI at the time was to provide a “standard interface across mobile-banking applications”, thereby facilitating interoperability. However, contemporaneous reporting indicates that UPI also had other “unofficial goals” including establishing indigenous companies in the payments landscape and breaking the monopoly of Visa and Mastercard – both dominant US players. By 2020, official language started articulating breaking the monopoly of foreign Big Tech as one of the stated goals of DPI. For instance, in August 2020, NITI Aayog, in its draft report on DEPA, stated, “breaking data silos and monopolies would allow fintech or healthcare companies to compete on product design, analytics, and value creation, rather than data access.”
Thereafter, in 2022 the government launched the ONDC as a Section 8 company under the Department of Promotion of Industry and Internal Trade (DPIIT) in the Ministry of Commerce. One of the overarching objectives of ONDC was “inclusivity and access for sellers, especially small and medium enterprises as well as local businesses along with increased choices and independency for consumers.” The government explicitly stated that it sought to replicate the success story of UPI “to remove monopolistic environments.” Even the Competition Commission of India (CCI) expected ONDC to emerge as a viable alternative to Big Tech, and in a 2021 edition of Fair Play remarked, “It is important to note that, once the ONDC is implemented, it is expected to curb digital monopolies wherein e-commerce giants and big technology companies tend to dominate.”
However, evidence suggests that UPI, whose success ONDC was meant to replicate, has itself failed to displace concentration in the digital payments ecosystem. The Indian UPI market is essentially a duopoly with Google Pay and Walmart-owned PhonePe accounting for a combined market share of nearly 80% – a trend that has continued since 2019. To counter this concentration, in 2020 NPCI introduced a 30% cap on UPI transaction volumes, effective from January 2021. Companies were given a transition period to reduce their share, with compliance originally due by December 2023. However, this deadline has been repeatedly extended by NPCI, with the revised timeline now delayed to December 2026. This repeated extension illustrates the difficulty of reversing concentration once the market has tipped in favour of incumbent entities. Similarly, Flipkart (whose parent company is Walmart) and Amazon account for nearly 70% of the Indian e-commerce market, illustrating how ONDC has been unable to achieve its lofty goals of countering Big Tech dominance in the e-commerce sector.
This persistence of concentration is also enabled by strategies deployed by dominant and/or deep-pocketed players, including incumbents leveraging their dominance in one market to exclude competitors in an adjacent market. In the case of XYZ Confidential v. Google LLC & Ors., the CCI found that Google leveraged its dominant position in the Play Store market to favour Google Pay over competing UPI apps. Specifically, the CCI found that Google had indulged in abuse of dominance by according Google Pay preferential treatment in its integration with the Play Store compared to competing apps. Even though the National Company Law Appellate Tribunal (NCLAT) subsequently reduced the penalty and overturned the CCI’s finding on denial of market access, it upheld the finding that Google had leveraged its dominance in one market to protect and promote Google Pay’s position in the market for UPI-enabled payment systems.
Another impediment to the ambition of using DPI as a tool to break entrenched digital ecosystems is that these initiatives often seek to enter markets that are already dominated by Big Tech while simultaneously entering into partnerships and strategic alliances with the same dominant technology corporations that they seek to displace. For instance, ONDC has entered into partnerships with different Big Tech companies including Google, Microsoft, and Amazon, even though the nature of these partnerships varies. While Google provides cloud infrastructure services, Amazon offers logistics and seller enablement services, demonstrating how DPIs can have the opposite effect by either reinforcing Big Tech’s infrastructural dependencies or creating new forms of complementary dependencies controlled by Big Tech.
Furthermore, participation of dominant entities such as Uber, Flipkart, and Microsoft in the ONDC network raises concerns about incumbents leveraging their existing dominance to reproduce market concentration within ostensibly open networks. This prompts important questions around the stated goals of DPI and the feasibility of achieving them without reproducing existing dependencies on dominant digital platforms.
Ultimately, this also demonstrates that it is inaccurate to position DPIs as an instrument to further sovereignty goals in their current form, when DPIs themselves serve as an enabler and source of Big Tech power. It is hardly surprising, then, that the Indian model is being co-opted by hyperscalers and organisations funded by multiple tech billionaires in their “private” capacities to adopt and scale the Indian model of “digital public infrastructure.” Through offerings labelled as “sovereignty as a service,” these actors are ensuring that an alternative devoid of Big Tech cannot be imagined or developed.
It is also worth acknowledging that in its apparent quest to countervail foreign monopolies, the Indian model of DPIs has led to the creation of entities that wield significant economic and political power within their respective ecosystems, as argued by Mila T. Samdub in Actually existing DPIs as architectures of hegemony. Meanwhile, the regulatory architecture fails to create adequate checks and balances on such concentration and centralisation of power. And in the prevailing “public-private partnership” model of Indian DPIs, it is equally important to consider the underlying conflicts of interest embedded within their governance structures. This tension is best illustrated through the example of NPCI, which operates UPI, the payment infrastructure on which banks and non-banks depend to facilitate nearly 84% of digital payments in India. However, NPCI is predominantly owned by banks (nearly 97%), along with other ecosystem participants including Amazon Pay and PhonePe (owned by Walmart), each of which holds a minority stake of approximately 0.44%.
At the same time, NPCI also enjoys significant rule-making authority over the UPI ecosystem, emerging as a “quasi-regulator” with the power to set terms of participation for its “competitors,” including eligibility to participate, compliance with procedural and technical guidelines, and the imposition of market-share caps ostensibly to maintain “competition.” As such, it functions as essential infrastructure for any non-banking entity that wants to participate in the retail payments space through UPI, while simultaneously operating its own payment instruments such as BHIM and RuPay. These enmeshed roles as an infrastructure provider, quasi-regulator, and network participant raise legitimate concerns about infrastructure neutrality, which requires access to infrastructure on a non-discriminatory basis.
These underlying conflicts are not peculiar to digital markets, and regulatory lessons from other sectors can inform approaches to addressing them. For instance, in the case of Surinder Singh Barmi v. Board of Control for Cricket in India (BCCI), the CCI recognised that the BCCI’s regulatory and governance powers were a significant source of its market power, enabling it to create entry barriers for competitors. In a finding of abuse, the CCI directed the BCCI to clarify rules governing approval for competing cricketing leagues in India and emphasised that such rules must follow principles of non-discrimination.
While Barmi demonstrates the role of competition law in addressing exclusionary conduct arising from the exercise of regulatory powers, a 2023 judgment by the Court of Justice of the European Union (CJEU) in European Superleague Company v. FIFA and UEFA lays down substantive criteria for the exercise of such regulatory powers. The CJEU held that prior-approval rules and sanctions must be transparent, objective, precise, non-discriminatory and proportionate.
Both cases underscore the importance of transparency while exercising regulatory functions that influence the conditions for competition. However, an analysis of NPCI in Governance, Openness and Security of Digital Public Infrastructure in India by the internet Research Lab highlights barriers to transparency and accountability of such systems. These include refusal to respond to Right to Information (RTI) requests, limited avenues for public consultation, and lack of independent oversight.
The governance concerns raised by NPCI’s case are also relevant to other DPI initiatives in India, although they may manifest differently depending on the underlying institutional design. For instance, in the case of ONDC, while conflicts arising from overlapping roles as infrastructure provider and market participant are not necessarily replicated, partnerships with dominant incumbents raise legitimate concerns. Such partnerships risk reproducing existing dependencies, reinforcing existing market power and enabling monopolies to extract disproportionate benefits from the ecosystem. Therefore, it is important to develop and design governance frameworks that mitigate attempts to capture an ostensibly open infrastructure by dominant entities in the ecosystem.
Over time, the Indian government has presented its DPI model as a means of addressing competition issues posed by dominant technology corporations. However, the UPI and ONDC case studies in India demonstrate how “interoperability” or “technical solutions” by themselves do little to prevent concentration or address structural issues embedded within digital ecosystems that thrive on infrastructural dependence or create new forms of complementary dependence. Digital markets exhibit characteristics associated with natural monopolies such as telecommunications and railways. Network effects, increasing returns to scale and scope, and data as a barrier to entry contribute to concentrated markets. Therefore, it is imperative for regulators to treat them as such and regulate them accordingly. This includes mandating utility-style obligations such as access requirements, interoperability, non-discrimination, transparency, data portability, and structural separation to eliminate underlying conflicts of interest where an entity is both a market participant and an infrastructure provider.
Considering that DPIs do little to address structural market power or natural monopoly characteristics of digital markets, it is ill-advised to use them as a substitute for robust competition policy and enforcement. While in some cases DPIs may facilitate interoperability and lower barriers to participation subject to their design and safeguards, they are the wrong instrument to address issues arising from excessive monopoly power and technological hegemony prevalent in concentrated digital ecosystems.
Isha Suri is an independent researcher and lawyer based in New Delhi, India.