Navigating the new cloud landscape through data residency and compliance

Cloud today is no longer just about speed, storage or scalability; it’s more about trust, control, and responsibility. However, as Indian businesses have stepped further into digital transformation, a question that used to be purely technical now stands as one of the paramount strategic imperatives: Where does our data reside in reality, and who governs it?

As conversations with industry leaders deepened over the years, a recurring theme emerged on how to balance compliance with India’s evolving data laws while still driving cloud performance and cost efficiency. The key question that everybody has been asking is: How do we fulfil our obligations toward India’s evolving data laws without putting a dent in performance or cost? This change is not occurring in isolation. There is the pressure of hard regulations, a rise in digital self-awareness, and a maturing market that recognizes sovereignty equally with innovation.

Regulation has rewritten the rules

The enactment of the Digital Personal Data Protection (DPDP) Act 2023 has truly changed the stress of the game. For the first time, the law officially holds a business in India accountable for guaranteeing that personal data, especially sensitive information, is kept and processed in conformity with the local laws. This is not simply a matter of rubber-stamp procedures. The consequences are very much real and impose a great risk on the reputation of the business.

But besides risk, it is all about readiness. A 2024 NASSCOM report showed that over 60% Indian enterprises had begun to reconsider their cloud strategy post-DPDP. With stricter data residency norms, the old logic of tossing everything towards an unmarked foreign hyper scale without local fallback or control would no longer fly.

From compliance to confidence

In the earlier days of DPDP, for many businesses, compliance was just another hurdle a real cost or complexity. But now, going the compliant route sets you apart. DHS, BFSI, Healthcare and e-commerce locales consider localized data storage as something that is not optional but an indication of trust. It is basically telling their customers and partners that they indeed take very seriously the protection of their information.

According to PwC India (2024), 72% of Indian consumers would accept brands that store data in India. They feel safer when their information is governed by local law.  In almost every conversation with decision-makers, one thing is clear — more and more of them are looking for platforms that focus on data localisation, clear audit trails, and India-based service guarantees. This isn’t just a trend — it’s a real and ongoing shift I’ve been watching closely.

Why Indian cloud infrastructure now makes sense

Once there were trade-offs associated with local infrastructure: slower delivery, no scaling options, and higher costs, that is not so anymore now. With the Indian cloud ecosystem maturing, several regional providers now advertise specific cloud solutions tailored to local workloads, be it regulatory alignment, price transparency, or even low-latency delivery.

The nearer your data center is to your user, the faster chance your product has for response time differences. Within the fintech, logistics, and digital payments sectors, such milliseconds count. Modular system pricing allows companies to now scale without big, bulky packages of standard size. For mid-size and startup companies, this is a win-acquisition-gaining enterprise-grade infrastructure under the flexibility of a start-up.

On-ground challenges and solutions

Many organisations still keep large parts of their infrastructure on foreign platforms. In migrating to compliant cloud solutions, one must deal with legacy code, data portability, vendor lock-ins, and performance reconfiguration. Let’s face it: there are many resistances. Internal teams are scared about some downtime, incompatible stuff, or just disrupting what’s already working.

But the reality is, the longer the businesses wait, the harder the migration becomes. And with more sector specific rules on the horizon (especially in financial services and government contracts), being ahead of the curve is not just smart, it’s necessary.

Migration doesn’t have to be all or nothing. Businesses can phase it. Start with critical data sets. Build parallel systems. Focus on modular architecture. Over time, a hybrid model can shift fully into a compliant, India first infrastructure.

The market is moving

Buying behaviour is shifting. Businesses today aren’t simply wondering what the cloud can do but what they really want to know is: Will it keep their data secure and compliant under Indian law? If things change, can they exit without being tied down by vendor lock-ins? And most importantly, is the pricing structure built in a way to support their business growth or am I paying for things I don’t need yet.

These are no longer just technical considerations rather they’re business critical conversations shaping the future of cloud adoption.

Customers from cloud providers should now demand more than just storage and uptime; they should demand transparency, portability and trust readiness. Ones that provide those features are already absorbing market shares, not only in India but also in regions sharing similar regulatory trends such as the UAE and Southeast Asia.

The road ahead: Digital sovereignty by design

India is no longer just a consumer of global cloud services, but it is actually creating its own story in infrastructure. With the Reserve Bank of India presently piloting cloud platforms for regulated financial institutions and state backing investments pouring into data centres, the country is building the foundation for a sovereign digital future. The opportunity for businesses is clear: build infrastructure that not only scales but also sustains compliance, adapts and provides protection. That is the real unlock of the present-day cloud landscape.

Final word

Cloud isn’t just a utility anymore, it’s a commitment to protect, to comply and to adapt with agility. As regulations tighten and digital trust becomes a defining currency, Indian businesses have a chance to lead with infrastructure that’s not just efficient but ethically and legally aligned. The companies that invest in compliance first architecture today won’t just survive tomorrow but they’ll be the one’s set the standard for what cloud excellence looks like in a sovereign digital India.

Sarthak Hooda is the Founder & CEO of Neon Cloud