Why Zoho is back in focus after Modi’s endorsement of Sridhar Vembu

Prime Minister Narendra Modi’s public praise for Zoho founder Sridhar Vembu at a conclave on 22 June has pushed one of India’s most prominent software companies back into the national spotlight. The endorsement comes at a time when the Centre is increasingly relying on Zoho for critical government communications infrastructure, placing the company at the centre of a wider debate over digital sovereignty, data security and the growing role of private firms in state functions.

Critics argue that the migration also raises uncomfortable questions about whether India’s own government technology institutions have been sidelined in favour of a private vendor for handling sensitive official communications.

The government's growing reliance on Zoho has simultaneously elevated the profile of its founder, Sridhar Vembu. A long-time advocate of indigenous technology development, Vembu has repeatedly argued that India should reduce its dependence on foreign software platforms and build domestic alternatives.

Vembu's emphasis on building Indian technology products and reducing dependence on overseas platforms aligns closely with the government's digital sovereignty agenda, a convergence that has become more visible as Zoho's role within public-sector systems has expanded.

At the same time attention has also turned to Vembu's public positions, which often echo the government's emphasis on swadeshi technology, self-reliance and economic nationalism. His appearance at RSS events and his commentary on Tamil Nadu politics have contributed to perceptions that Zoho's rise is occurring alongside a broader ideological convergence with the ruling establishment.

Vembu served on the National Security Advisory Board headed by National Security Adviser Ajit Doval, and his company's expanding footprint within government systems has prompted questions in some quarters about the closeness between policy priorities and the commercial success of a single technology provider.

While there is no suggestion of impropriety, the overlap has drawn attention as Zoho's role within government infrastructure continues to expand.

Yet Zoho's growing prominence has also brought heightened scrutiny.

One set of concerns centres on the concentration of critical government communications infrastructure within a private company. While officials emphasise that Zoho is an Indian firm and that data remains within the country, critics argue that digital sovereignty is not simply a question of replacing foreign providers with domestic ones. The larger issue, they contend, is whether essential government systems should become dependent on any single private vendor.

Zoho was selected after a competitive bidding process that included a proof-of-concept evaluation with shortlisted vendors and government users. Migration of government email accounts began in 2024-25 and accelerated across ministries and departments.

Others have questioned what the migration says about the capabilities of the National Informatics Centre, which has served as the government's technology backbone for decades. The decision to move millions of official email accounts from NIC-managed infrastructure to a private platform has fuelled debate over whether the state is strengthening indigenous technological capacity or effectively outsourcing a strategic function that government institutions themselves should be able to perform.

Privacy and security concerns have also surfaced around some of Zoho's products. The company's messaging platform, Arattai, faced criticism after users pointed out the absence of default end-to-end encryption in certain communications features.

Although Vembu has maintained that Zoho's business model does not rely on monetising user data and has pledged stronger encryption capabilities, the episode underscored the higher standards of scrutiny that accompany the company's growing role in government systems.

Former IAS officer K.B.S. Sidhu was quoted in The Wire as arguing that independently audited security frameworks, robust encryption standards and transparent oversight mechanisms should be prerequisites before highly sensitive government communications are entrusted to a private platform at scale. Such concerns become more significant when the communications involved may include Cabinet documents, policy deliberations and national-security-related correspondence.

The government maintains that the migration underwent extensive security vetting involving agencies such as NIC and CERT-In and that Zoho's systems are subject to regular audits. Nevertheless, as millions of government communications increasingly flow through privately managed infrastructure, questions around transparency, accountability, resilience and vendor dependence are unlikely to disappear.

The Centre's embrace of Zoho therefore represents far more than a technology procurement decision. It reflects a broader policy choice about how India intends to build its digital future: whether through strengthening state-run platforms, partnering with domestic private champions, or some combination of both.

Modi's endorsement of Vembu has amplified attention on a company that increasingly sits at the intersection of technology policy, national security and industrial strategy. For supporters, Zoho represents proof that Indian firms can build world-class digital products. For critics, its rise raises equally important questions about oversight, concentration of power and the extent to which critical state infrastructure should depend on private technology providers.

As the government deepens its commitment to indigenous digital platforms, Zoho's success story is no longer just about software. It has become a test case for how India balances self-reliance, security and accountability in the management of its digital state.