Security. Sovereignty.
"Microsoft has been sharing Indian bank customers' data with U.S. intelligence agencies"
=> https://www.neowin.net/news/microsoft-has-been-sharing-india...
Just, Devil's Advocate here, but can you blame them?
Tech companies allowed it as well because they wanted to capture Indian mindshare which would eventually become their largest customer base.
No.
India has a large domestic demand but it would be awful to allow non rupee denominated assets to supply that demand.
Imagine tomorrow India got rid of its strong tariff regime.
India's inflation is under control through making it punitive to buy foreign goods which India has a strong demand for.
The idea ever since Gandhi is to use domestic capabilities to provide services India demands. Domestic tariffs are also a form of coercion - but in this case it serves India's national interest.
With the Brits the main source of oppression was through preferential trade that tilted everything in their favour - either through hard power of soft ( like they still do today ).
You can argue that it might be a bad idea to do that. However, as a Sovereign Nation, they do reserve the right to do whatever they want in their country.
India mostly allowed free access to US tech companies for a while.
In exchange tech companies created a lot of middle class jobs in many indian cities.
But more importantly there seemed to an unwritten trade deal involving immigration.
Ever since Trump made his hardline immigration stance actionable, Indian consulting companies have taken a beating.
India's main dollar income source has been Indian working abroad.
It was an win win for US multi nationals, they got access to a large and growing market and also had access to cheap skilled labour.
It was also an win win for the upper middle class ( who really control the conversations ) in india, since they got access to US technology, better paid domestic software jobs and send their kids to the US.
In my own reading on India. They will crush any foreign company that tries to gain a monopoly market share - they did it with middle eastern telecom operators, and they will do it with US tech companies when its convenient. They rather their own billionaires have the monopoly.
There is nothing anybody else can do about it, since they have the numbers. So its really risky to invest large amount of capital in India, even if the average Indian is really thirty for capital and investment.
But I have noticed the average capitalist falls for India's trap time and again. I think it has to do with returns, if India was offering 20% RoR and companies were getting 2% RoR then as a CEO / manager I had to change my asset allocation regardless of future political risks involved.