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Introduction

In the labyrinthine world of digital currencies, a new chapter unfolds as India intensifies its scrutiny over the ethereal realm of offshore cryptocurrency exchanges. With nuance and determination that virtually mirrors the Byzantine complexities of the very currencies they seek to regulate, Indian authorities embark on a course of stringent oversight, bringing to the fore an ever-evolving narrative of control and compliance in the fintech sector. The government's latest manoeuvre—a directive to Apple Inc. to excise the apps of certain platforms, including the colossus Binance, from its App Store in India—signals a crescendo in the nation's efforts to rein in the unbridled digital bazaar that had hitherto thrived in a semi-autonomous expanse of cyberspace.

The directive, with ramifications as significant and intricate as the cryptographic algorithms that underpin the blockchain, stems from the Ministry of Electronics and Information Technology, which has cast eight exchanges, including Bitfinex, HTX, and Kucoin, into the shadows, rendering their apps as elusive as the Higgs boson in the vast App Store universe. The movement of these exchanges from visibility to obscurity in the digital storefront is cloaked in secrecy, with sources privy to this development remaining cloaked in anonymity, their identities as guarded as the cryptographic keys that secure blockchain transactions.

The Contention 

This escalation, however, did not manifest from the vacuum of the ether; it is the culmination of a series of precipitating actions that began unfolding on December 28th, when the Indian authorities unfurled a net over nine exchanges, ensnaring them with suspicions of malfeasance. The spectre of inaccessible funds, a byproduct of this entanglement, has since haunted Indian crypto traders, prompting a migration of deposits to local exchanges that operate within the nation's regulatory framework—a fortress against the uncertainties of the offshore crypto tempest.

The extent of the authorities' reach manifests further, beckoning Alphabet Inc.'s Google to follow in Apple's footsteps. Yet, in a display of the unpredictable nature of enforcement, the Google Play Store in India still played host to the very apps that Apple's digital Eden had forsaken as of a nondescript Wednesday afternoon, marked by the relentless march of time. The triad of power-brokers—Apple, Google, and India's technology ministry—has maintained a stance as enigmatic as the Sphinx, their communications as impenetrable as the vaults that secure the nation's precious monetary reserves.

Compounding the tightening of this digital noose, the Financial Intelligence Unit of India, a sentinel ever vigilant at the gates of financial propriety, unfurled a compliance show-cause notice to the nine offshore platforms, an ultimatum demanding they justify their elusive presence in Indian cyberspace. The FIU's decree echoed with clarity amidst the cacophony of regulatory overtures: these digital entities were tethered to operations sequestered in the shadows, skirting the reach of India's anti-money laundering edicts, their websites lingering in cyberspace like forbidden fruit, tantalisingly within reach yet potentially laced with the cyanide of non-compliance.

In this chaotic tableau of constraint and control, a glimmer of presence remains—only Bitstamp has managed to brave the regulatory storm, maintaining its presence on the Indian App Store, a lone beacon amid the turbulent sea of regimentation. Kraken, another leviathan of crypto depths, presented only its Pro version to the Indian connoisseurs of the digital marketplace. An aura of silence envelops industry giants such as Binance, Bitfinex, and KuCoin, their absence forming a void as profound as the dark side of the moon in the consciousness of Indian users. HTX, formerly known as Huobi, has announced a departure from Indian operations with the detached finality of a distant celestial body, cold and indifferent to the gravitational pull of India's regulatory orbit.

Compliances

In compliance with the provisions of the Money Laundering Act (PMLA) 2002 and the recent uproar on crypto assessment apps, Apple store finally removed these apps namely Binance and Kucoin from the store after receiving show cause notice. The alleged illegal operation and failure to comply with existing money laundering laws are major reasons for their removal. 

The Indian Narrative 

The overarching narrative of India's embrace of rigid oversight aligns with a broader global paradigm shift, where digital financial assets are increasingly subjected to the same degree of scrutiny as their physical analogues. The persistence in imposing anti-money laundering provisions upon the crypto sector reflects this shift, with India positioning its regulatory lens in alignment with the stars of international accountability. The preceding year bore witness to seismic shifts as Indian authorities imposed a tax upon crypto transactions, a move that precipitated a downfall in trading volumes, reminiscent of Icarus's fateful flight—hubris personified as his waxen appendages succumbed to the unrelenting kiss of the sun.

On a local scale, trading powerhouses lament the imposition of a 1% levy, colloquially known as Tax Deducted at Source. This fiscal shackle drove an exodus of Indian crypto traders into the waiting, seemingly benevolent arms of offshore financial Edens, absolved of such taxational rites. As Sumit Gupta, CEO of CoinDCX, recounted, this fiscal migration witnessed the haemorrhaging of revenue. His estimation that a staggering 95% of trading volume abandoned local shores for the tranquil harbours of offshore havens punctuates the magnitude of this phenomenon.

Conclusion 

Ultimately, the story of India's proactive clampdown on offshore crypto exchanges resembles a meticulously woven tapestry of regulatory ardour, financial prudence, and the inexorable progression towards a future where digital incarnations mirror the scrutinised tangibility of physical assets. It is a saga delineating a nation's valiant navigation through the tempestuous, cryptic waters of cryptocurrency, helming its ship with unwavering determination, with eyes keenly trained on the farthest reaches of the horizon. Here, amidst the fusion of digital and corporeal realms, India charts its destiny, setting its sails towards an inextricably linked future that promises to shape the contour of the global financial landscape.

References 

• https://www.business-standard.com/markets/cryptocurrency/govt-escalates-clampdown-on-offshore-crypto-venues-like-binance-report-124011000586_1.html
• https://www.cnbctv18.com/technology/india-escalates-clampdown-on-offshore-crypto-exchanges-like-binance-18763111.htm
• https://economictimes.indiatimes.com/tech/technology/centre-blocks-web-platforms-of-offshore-crypto-apps-binance-kucoin-and-others/articleshow/106783697.cms?from=mdr

Over the last decade, battlefields have percolated from mountains, deserts, jungles, seas, and the skies into the invisible networks of code and cables. Cyberwarfare is no longer a distant possibility but today’s reality. The cyberattacks of Estonia in 2007, the crippling of Iran’s nuclear program by the Stuxnet virus, the SolarWinds and Colonial Pipeline breaches in recent years have proved one thing: that nations can now paralyze economies and infrastructures without firing a bullet.  Cyber operations now fall beyond the traditional threshold of war, allowing aggressors to exploit the grey zone where full-scale retaliation may be unlikely. 

At the same time, this ambiguity has also given rise to the concept of cyber deterrence. It is a concept that has been borrowed from the nuclear strategies during the Cold War era and has been adapted to the digital age. At the core, cyber deterrence seeks to alter the adversary’s cost-benefit calculation that makes attacks either too costly or pointless to pursue. While power blocs like the US, Russia, and China continue to build up their cyber arsenals, smaller nations can hold unique advantages, most importantly in terms of their resilience, if not firepower.   

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Understanding the concept of Cyber Deterrence

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Deterrence, in its classic sense, is about preventing action through the fear of consequences. It usually manifests in four mechanisms as follows:

• Punishment by threatening to impose costs on attackers, whether by counter-attacks, economic sanctions, or even conventional forces. 
• Denial of attacks by making them futile through hardened defences, and ensuring the systems to resist, recover, and continue to function. 
• Entanglement by leveraging interdependence in trade, finance, and technology to make attacks costly for both attackers and defenders. 
• Norms can also help shape behaviour by stigmatizing reckless cyber actions by imposing reputational costs that can exceed any gains. 

However, great powers have always emphasized the importance of punishment as a tool to showcase their power by employing offensive cyber arsenals to instill psychological pressure on their rivals. Yet in cyberspace, punishment has inherent flaws. 

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The Advantage of Asymmetry 

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For small states,  smaller geographical size can be utilised as a benefit. Three advantages of this exist, such as:

• With fewer critical infrastructures to protect,  resources can be concentrated. For example, Denmark, with a modest population of $40 million cyber budget, is considered to be among the most cyber-secure nations, despite receiving billions of US spending.  
• Smaller bureaucracies enable faster response. The centralised cyber command of Singapore allows it to ensure a rapid coordination between the government and the private sector. 
• Smaller countries with lesser populations can foster a higher public awareness and participation in cyber hygiene by amplifying national resilience.  

In short, defending a small digital fortress can be easier than securing a sprawling empire of interconnected systems. 

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Lessons from Estonia and Singapore 

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The 2007 crisis of Estonia remains a case study of cyber resilience. Although its government, bank, and media were targeted in offline mode, Estonia emerged stronger by investing heavily in cyber defense mechanisms. Another effort in this case stood was with the hosting of NATO’s Cooperative Cyber Defence Centre of Excellence to build one of the world’s most resilient e-governance models. 

Singapore is another case. Where, recognising its vulnerability as a global financial hub, it has adopted a defense-centric deterrence strategy by focusing on redundancy, cyber education, and international partnership rather than offensive capacity. These approaches can also showcase that deterrence is not always about scaring attackers with retaliation, it is about making the attacks meaningless.  

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Cyber deterrence and Asymmetric Warfare

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Cyber conflict is understood through the lens of asymmetric warfare, where weaker actors exploit the unconventional and stronger foes. As guerrillas get outmanoeuvred by superpowers in Vietnam or Afghanistan, small states hold the capability to frustrate the cyber giants by turning their size into a shield. The essence of asymmetric cyber defence also lies in three principles, which can be mentioned as; 

• Resilience over retaliation by ensuring a rapid recovery to neutralise the goals of the attackers. 
• Undertaking smart investments focusing on limited budgets over critical assets, not sprawling infrastructures. 
• Leveraging norms to shape the international opinions to stigmatize the aggressors and increase the reputational costs. 

This also helps to transform the levels of cyber deterrence into a game of endurance rather than escalating it into a domain where small states can excel. 

There remain challenges as well, as attribution problems persist, the smaller nations still depend on foreign technology, which the adversaries have sought to exploit. Issues over the shortage of talent have plagued the small states, as cyber professionals have migrated to get lucrative jobs abroad. Moreover, building deterrence capability through norms requires active multilateral cooperation, which may not be possible for all small nations to sustain. 

Conclusion

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Cyberwarfare represents a new frontier of asymmetric conflict where size does not guarantee safety or supremacy. Great powers have often dominated the offensive cyber arsenals, where small states have carved their own path towards security by focusing on defence, resilience, and international collaboration. The examples of Singapore and Estonia demonstrate the fact that the small size of a state can be its identity of a hidden strength in capabilities like cyberspace, allowing nimbleness, concentration of resources and societal cohesion. In the long run, cyber deterrence for small states will not rest on fearsome retaliation but on making attacks futile and recovery inevitable. 

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References

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• https://bluegoatcyber.com/blog/asymmetric-warfare/
• https://digitalcommons.usf.edu/cgi/viewcontent.cgi?article=2268&context=jss
• https://www.linkedin.com/pulse/rising-tide-cyberwarfare-battle-between-superpowers-hussain/ 
• https://digitalcommons.odu.edu/cgi/viewcontent.cgi?article=1243&context=gpis_etds
• https://www.scirp.org/journal/paperinformation?paperid=141708
• https://digitalcommons.odu.edu/cgi/viewcontent.cgi?article=1243&context=gpis_etds 

The global race for Artificial Intelligence is heating up, and India has become one of its most important battlegrounds. Over the past few months, tech giants like OpenAI (ChatGPT), Google (Gemini), X (Grok), Meta (Llama), and Perplexity AI have stepped up their presence in the country,  not by selling their AI tools, but by offering them free or at deep discounts.

At first, it feels like a huge win for India’s digital generation. Students, professionals, and entrepreneurs today can tap into some of the world’s most powerful AI tools without paying a rupee. It feels like a digital revolution unfolding in real time. Yet, beneath this generosity lies a more complicated truth. Experts caution that this wave of “free” AI access isn’t without strings attached. This offering impacts how India handles data privacy, the fairness of competition, and the pace of the development of homegrown AI innovation that the country is focusing on. 

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The Market Strategy: Free Now, Pay Later  

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The choice of global AI companies to offer free access in India is a calculated business strategy. With one of the world’s largest and fastest-growing digital populations, India is a market no tech giant wants to miss. By giving away their AI tools for free, these firms are playing a long game:

1. Securing market share early: Flooding the market with free access helps them quickly attract millions of users before Indian startups have a chance to catch up. Recent examples are Perplexity, ChatGPT Go and Gemini AI which are offering free subscriptions to Indian users. 
2. Gathering local data: Every interaction, every prompt, question, or language pattern, helps these models learn from larger datasets to improve their product offerings in India and the rest of the world. Nothing is free in the world - as the popular saying goes, “if something is free, means you are the product. The same goes for these AI platforms: they monetise user data by analysing chats and their behaviour to refine their model and build paid products. This creates the privacy risk as India currently lacks specific laws to govern how such data is stored, processed or used for AI training. 
3. Create user dependency: Once users grow accustomed to the quality and convenience of these global models, shifting to Indian alternatives,  even when they become paid, will be difficult. This approach mirrors the “freemium” model used in other tech sectors, where users are first attracted through free access and later monetised through subscriptions or premium features, raising ethical concerns.  

Impact on Indian Users

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For most Indians, the short-term impact of free AI access feels overwhelmingly positive. Tools like ChatGPT and Gemini are breaking down barriers by democratising knowledge and making advanced technology available to everyone, from students, professionals, to small businesses.  It’s changing how people learn, think and do - all without spending a single rupee.But the long-term picture isn’t quite as simple. Beneath the convenience lies a set of growing concerns:

• Data privacy risks: Many users don’t realise that their chats, prompts, or queries might be stored and used to train global AI models. Without strong data protection laws in action, sensitive Indian data could easily find its way into foreign systems.
• Overdependence on foreign technology: Once these AI tools become part of people’s daily lives, moving away from them gets harder — especially if free access later turns into paid plans or comes with restrictive conditions.
• Language and cultural bias: Most large AI models are still built mainly around English and Western data. Without enough Indian language content and cultural representation, the technology risks overlooking the very diversity that defines India

Impact on India’s AI Ecosystem  

India’s Generative AI market, valued at USD $ 1.30 billion in 2024, is projected to reach 5.40 billion by 2033. Yet, this growth story may become uneven if global players dominate early.  

Domestic AI startups face multiple hurdles — limited funding, high compute costs, and difficulty in accessing large, diverse datasets. The arrival of free, GPT-4-level models sharpens these challenges by raising user expectations and increasing customer acquisition costs.  

As AI analyst Kashyap Kompella notes, “If users can access GPT-4-level quality at zero cost, their incentive to try local models that still need refinement will be low.” This could stifle innovation at home, resulting in a shallow domestic AI ecosystem where India consumes global technology but contributes little to its creation.  

CCI’s Intervention: Guarding Fair Competition  

The Competition Commission of India (CCI) has started taking note of how global AI companies are shaping India’s digital market. In a recent report, it cautioned that AI-driven pricing strategies such as offering free or heavily subsidised access could distort healthy competition and create an uneven playing field for smaller Indian developers.

The CCI’s decision to step in is both timely and necessary. Without proper oversight, such tactics could gradually push homegrown AI startups to the sidelines and allow a few foreign tech giants to gain disproportionate influence over India’s emerging AI economy.  

 What the Indian Government Should Do  

To ensure India’s AI landscape remains competitive, inclusive, and innovation-driven, the government must adopt a balanced strategy that safeguards users while empowering local developers.  

 1. Promote Fair Competition  

The government should mandate transparency in free access offers, including their duration, renewal terms, and data-use policies.  Exclusivity deals between foreign AI firms and telecom or device companies must be closely monitored to prevent monopolistic practices.  

 2. Strengthen Data Protection 

Under the Digital Personal Data Protection (DPDP) Act, companies should be required to obtain explicit consent from users before using data for model training.  Encourage data localisation, ensuring that sensitive Indian data remains stored within India’s borders.  

3. Support Domestic AI Innovation  

Accelerate the implementation of the IndiaAI Mission to provide public compute infrastructure, open datasets, and research funding to local AI developers like  Sarvam AI, an Indian company chosen by the government to build the country's first homegrown large language model (LLM) under IndianAI Mission. 

4. Create an Open AI Ecosystem

India should develop national AI benchmarks to evaluate all models, foreign or domestic, on performance, fairness, and linguistic diversity. And at the same time, they have their own national data Centre to train their indigenous  AI models. 

5. Encourage Responsible Global Collaboration

Speaking at the AI Action Summit 2025, the Prime Minister highlighted that governance should go beyond managing risks and should also promote innovation for the global good. Building on this idea, India should encourage global AI companies to invest meaningfully in the country’s ecosystem through research labs, data centres, and AI education programmes. Such collaborations will ensure that these partnerships not only expand markets but also create value, jobs and knowledge within India.

Conclusion

The surge of free AI access across India represents a defining moment in the nation’s digital journey. On one hand, it’s empowering millions of people and accelerating AI awareness like never before. On the other hand, it poses serious challenges from over-reliance on foreign platforms to potential risks around data privacy and the slow growth of local innovation. India’s real test will be finding the right balance between access and autonomy, allowing global AI leaders to innovate and operate here, but within a framework that protects the interests of Indian users, startups, and data ecosystems. With strong and timely action under the Digital Personal Data Protection (DPDP) Act, the IndiaAI Mission, and the Competition Commission of India’s (CCI) active oversight, India can make sure this AI revolution isn’t just something that happens to the country, but for it. 

References

1. https://www.moneycontrol.com/artificial-intelligence/cci-study-flags-steep-barriers-for-indian-ai-startups-calls-for-open-data-and-compute-access-to-level-playing-field-article-13600606.html# 
2. https://www.imarcgroup.com/india-generative-ai-market 
3. https://www.mea.gov.in/Speeches-Statements.htm?dtl/39020/Opening_Address_by_Prime_Minister_Shri_Narendra_Modi_at_the_AI_Action_Summit_Paris_February_11_2025 
4. https://m.economictimes.com/tech/artificial-intelligence/nasscom-planning-local-benchmarks-for-indic-ai-models/articleshow/124218208.cms 
5. https://indianexpress.com/article/business/centre-selects-start-up-sarvam-to-build-country-first-homegrown-ai-model-9967243/# 

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