India’s homegrown messaging app, Zoho Arattai, is challenging entrenched global giants like WhatsApp. But beyond nationalism, its success will hinge on strategy, investment and features. Veteran investor and former Infosys board member Mohandas Pai shares his insights. Registered on the Google Play and Apple App stores from the US, the app has raised questions about data security. Pai weighed in, “global app stores are simply a distribution mechanism. Vembu has clarified that Arattai’s data will be stored in India under Zoho’s care.” Pai finds the public’s apprehension puzzling as they are comfortable with WhatsApp and Gmail, whose data is stored outside India, yet they question an Indian app.
Innovation Alone Isn’t Enough
The larger issue is why governments worldwide are cautious about foreign-owned apps. Apps registered outside India, particularly US based ones are subject to foreign laws. Data stored domestically is subject to Indian law, giving users control and protection. But promoting Indian apps isn’t just about national pride. “Indian apps must compete against global platforms that are deeply entrenched, feature-rich and networked. Changing user habits requires significant investment,” Pai emphasised.
He cited Koo, the Indian alternative to Twitter, as a cautionary tale. Despite offering multiple Indian languages and over six million users, the platform struggled. “Government support is essential,” Pai stressed and continued, “marketing alone cannot create an ecosystem. It requires public sector adoption, grants and a long-term strategy.”
Talent vs. Capital
Economically, Pai sees apps like Arattai benefiting Indian users at minimal cost by facilitating seamless communication and collaboration. Yet, he warned that usability and features will determine success. Looking beyond messaging, Pai identified AI-driven applications as India’s next frontier of innovation, but lack of funding remains a barrier. “India has immense talent and innovation, but we lack capital. Between 2014 and 2024, the US invested USD 2.34 trillion in venture capital and the startup system, China USD 845 billion, and India just USD 160 billion, much of it from overseas. Innovation without capital cannot scale,” cautioned Pai. India’s AI mission, which is around Rs 10,400 crore, he stated to be peanuts when compared to global standards. US DARPA/defense tech spending stand at USD 25 billion/year on technology and innovation while China has spent close to USD 150 billion in AI over 7 years and USD 300 billion in alternate energy over the last decade. Pai emphasised on large-scale government programmes to foster homegrown innovation, akin to the PLI scheme. “Public funding, university research support and active procurement of innovative products are essential to creating high-quality jobs and a sustainable tech ecosystem,” he pointed out. For India to emerge as a technological superpower, Pai concluded, “we have the talent, ideas and creativity. What we need is capital to turn ideas into globally competitive technology.”
Arattai may be just the beginning. But without financial and strategic backing, even India’s most promising apps could struggle to compete with entrenched global giants. The dream of a self-reliant digital India depends not just on innovation, but on the ecosystem that nurtures it.