Many have explained Trump's obsession with raising taxes as mercantilism, practised by a host of past hegemons to protect domestic industry and enrich the exchequer by weaponising import duties. But these policies were short-lived. Surging inflation, unemployment and economic stagnation always resulted in repeal, a fate to which Trump's foray will eventually be consigned.
But more pertinent is the similarity with the aftermath of the fall of Constantinople in 1453, when the Ottoman Turks imposed exorbitant taxes and arbitrarily sanctioned or favoured nations to exercise absolute control over the last mile of the Silk Road. Europe could, thus, be made permanently dependent while Turks retained most of the profits.
Replace Silk Road with digitalisation and account for Trump's focus on maintaining digital supremacy - from demanding tech ownership and onshoring to insulating platforms from a 2% equalisation levy - and the analogy with this Trump-l'oeil is not so far-fetched.
For developing nations, if first-mile digital sovereignty - undersea cables, landing stations and other infra - is critical to national security, last-mile digital sovereignty is key to long-term survival. As the global magnitude of digital data expands, it disproportionately influences political institutions and policies through rapidly advancing tech, armies of threat actors and unlimited volumes of misinformation. Undersea cable cuts last week in the Red Sea that disrupted internet services across multiple regions including India, particularly affecting cloud and network service, attests to this threat.
Many believe that multinational negotiations today are dependent on algorithms, which prioritise protocols over mutual interests, define the agenda and transform the dynamics of realpolitik. As a result, increasing hostility often emerges within long-cultivated partnerships, reducing them to one-sided transactional relationships. If digital tools are upending international relations, can global commercial channels be far behind?
In this context, last mile includes all digital infra and platforms that support points of origin, collection and consumption of data. 2023 statistics show that millions of devices, referred to collectively as IoT, were most prevalent in North America, which had 13.4 connected devices per capita, while Asia stood at a mere 3.1. Over the next decade, however, Asia is likely to see exponential digital growth. Already established manufacturers and networks are likely to control gateways of commercial, social and political power.
These devices - phones, wearables, and even connected mobile assets like automobiles - will become digital hubs offering insights into shopping, work, lifestyles, and sensitive social, political and health data. But what makes this concerning is that these infra and sensor providers can ultimately be made to serve interests of a single foreign nation and effectively threaten any emerging market's right to self-determination and self-regulation.
Google and Apple, for instance, can track the daily online visits and movement patterns of crores of Indians and can, if pressured by governments, share the same. Moreover, inferences derived from this data can reveal political affiliations (including presence at rallies), serve as fodder for election interference, and disclose sensitive personal information.
On the face of it, India seems to be making the right moves to counter these eventualities. It has strengthened CCI, drafted a Digital Personal Data Protection (DPDP) Bill, made tentative investments in AI tech while mulling 'cautious support' for China's global AI consortium, and promoted GCCs and localised data storage.
But this is not enough. While ex ante rules should be imposed on digital intermediaries, penalties aren't a sustainable solution for CCI when the traditional definition of a monopoly is digitally irrelevant. Separately, while local data storage seems a natural adjacency to digital sovereignty, the reality is that data centres deplete water resources, potentially endangering livelihood and survival of citizens - while allowing the US to retain unchallenged digital supremacy.
Instead of meekly joining a global consortium of countries with competing interests to vet algorithmic fairness and audit social and commercial consequences of AI-driven practices, India should invest in creating its own homegrown digital platforms, data centres and AI solutions.
Where this is not immediately possible, it should allow access to foreign participants while making domestic incorporation, indigenous operation and tech transfer mandatory. This requires political will and investment. If the private sector can't support this independently, GoI must step in and nurture these initiatives to fruition - more rigorously than it has for ONDC - before determining if they should remain a public utility or be privatised.
This may result in a splinternet - a structure that reassigns power and control to nations and geographies that operate their infra and networks, and prioritise local interests and needs. Such power could be abused by a paranoid government. But this model could also result in greater technical collaboration if regional players learn to work with their differences.
It is worth remembering that after Europe recovered from the Ottoman conquest, some countries leveraged their growing maritime expertise to explore new trading opportunities and become economic powerhouses. Ultimately, the Silk Road declined but global commerce thrived. If India were to strike out on its own, the prima facie losers would only be the US' entrenched digital monopolies. The likely alternative is digital subjugation.
But more pertinent is the similarity with the aftermath of the fall of Constantinople in 1453, when the Ottoman Turks imposed exorbitant taxes and arbitrarily sanctioned or favoured nations to exercise absolute control over the last mile of the Silk Road. Europe could, thus, be made permanently dependent while Turks retained most of the profits.
Replace Silk Road with digitalisation and account for Trump's focus on maintaining digital supremacy - from demanding tech ownership and onshoring to insulating platforms from a 2% equalisation levy - and the analogy with this Trump-l'oeil is not so far-fetched.
For developing nations, if first-mile digital sovereignty - undersea cables, landing stations and other infra - is critical to national security, last-mile digital sovereignty is key to long-term survival. As the global magnitude of digital data expands, it disproportionately influences political institutions and policies through rapidly advancing tech, armies of threat actors and unlimited volumes of misinformation. Undersea cable cuts last week in the Red Sea that disrupted internet services across multiple regions including India, particularly affecting cloud and network service, attests to this threat.
Many believe that multinational negotiations today are dependent on algorithms, which prioritise protocols over mutual interests, define the agenda and transform the dynamics of realpolitik. As a result, increasing hostility often emerges within long-cultivated partnerships, reducing them to one-sided transactional relationships. If digital tools are upending international relations, can global commercial channels be far behind?
In this context, last mile includes all digital infra and platforms that support points of origin, collection and consumption of data. 2023 statistics show that millions of devices, referred to collectively as IoT, were most prevalent in North America, which had 13.4 connected devices per capita, while Asia stood at a mere 3.1. Over the next decade, however, Asia is likely to see exponential digital growth. Already established manufacturers and networks are likely to control gateways of commercial, social and political power.
These devices - phones, wearables, and even connected mobile assets like automobiles - will become digital hubs offering insights into shopping, work, lifestyles, and sensitive social, political and health data. But what makes this concerning is that these infra and sensor providers can ultimately be made to serve interests of a single foreign nation and effectively threaten any emerging market's right to self-determination and self-regulation.
Google and Apple, for instance, can track the daily online visits and movement patterns of crores of Indians and can, if pressured by governments, share the same. Moreover, inferences derived from this data can reveal political affiliations (including presence at rallies), serve as fodder for election interference, and disclose sensitive personal information.
On the face of it, India seems to be making the right moves to counter these eventualities. It has strengthened CCI, drafted a Digital Personal Data Protection (DPDP) Bill, made tentative investments in AI tech while mulling 'cautious support' for China's global AI consortium, and promoted GCCs and localised data storage.
But this is not enough. While ex ante rules should be imposed on digital intermediaries, penalties aren't a sustainable solution for CCI when the traditional definition of a monopoly is digitally irrelevant. Separately, while local data storage seems a natural adjacency to digital sovereignty, the reality is that data centres deplete water resources, potentially endangering livelihood and survival of citizens - while allowing the US to retain unchallenged digital supremacy.
Instead of meekly joining a global consortium of countries with competing interests to vet algorithmic fairness and audit social and commercial consequences of AI-driven practices, India should invest in creating its own homegrown digital platforms, data centres and AI solutions.
Where this is not immediately possible, it should allow access to foreign participants while making domestic incorporation, indigenous operation and tech transfer mandatory. This requires political will and investment. If the private sector can't support this independently, GoI must step in and nurture these initiatives to fruition - more rigorously than it has for ONDC - before determining if they should remain a public utility or be privatised.
This may result in a splinternet - a structure that reassigns power and control to nations and geographies that operate their infra and networks, and prioritise local interests and needs. Such power could be abused by a paranoid government. But this model could also result in greater technical collaboration if regional players learn to work with their differences.
It is worth remembering that after Europe recovered from the Ottoman conquest, some countries leveraged their growing maritime expertise to explore new trading opportunities and become economic powerhouses. Ultimately, the Silk Road declined but global commerce thrived. If India were to strike out on its own, the prima facie losers would only be the US' entrenched digital monopolies. The likely alternative is digital subjugation.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Ateesh Tankha
The writer is founder-CEO, ALSOWISE Content Solutions
Syagnik Banerjee
Professor of marketing, University of Michigan, US