Data Is the New Oil in Digital Economy

Of all the phrases coined to capture the spirit of our time, “data is the new oil” has become one of the most ubiquitous. It’s a powerful metaphor, but its profound implications are best understood not in the abstract halls of Silicon Valley, but in the vibrant, complex, and rapidly transforming landscape of India. Here, the comparison isn’t just theoretical; it’s a lived reality, a blueprint for a national leap into the future. Why has this particular comparison stuck? The answer lies in understanding that much like oil in the 20th century, data is the crude, unrefined resource that powers the entire digital economy—and India is both a massive oilfield and a rapidly building refinery.

The analogy is powerful because data shares three critical characteristics with oil: it requires extraction and refinement, it’s a source of immense power and value, and it comes with significant ethical considerations. Let’s explore this through the lens of India’s own digital revolution.

The Indian Crude Reserve: A Massive, Untapped Gusher

When oil was first discovered, it was a raw, unprocessed substance. Its potential was clear, but its applications were rudimentary until the refineries were built. India’s data story begins with a similar gusher of “crude data.”

The driving force behind this has been the ‘India Stack’—a set of groundbreaking digital public infrastructures. At its heart is Aadhaar, the world’s largest biometric ID system, which has provided a digital identity to over 1.3 billion Indians. This was the first and most crucial drill, tapping into a vast reservoir of identity data. Then came UPI (Unified Payments Interface), which transformed financial transactions into real-time, digital events.

Every UPI payment at a chai stall, every Aadhaar-authenticated welfare transfer, every search on Flipkart for a new sari, and every swipe on a Zomato food order—this is India’s raw data. It is voluminous, diverse, and messy, but it holds the potential to redefine every facet of the nation’s economy. We are witnessing a digital wildcatter boom, with companies and the government drilling data wells at an unprecedented rate, creating a deluge of information that represents the crude potential of a billion aspirations.

 The Indian Refinery: Distilling Data into Disruption

Crude oil is useless without refineries to distil it into petrol, plastic, and chemicals. Similarly, India’s raw data is being processed in sophisticated “refineries”—the algorithms of its tech startups, the analytics departments of its legacy corporations, and the policy-making engines of its government.

This is where data science cleans, processes, and analyses the raw data to create actionable insights—the high-octane fuel of the new economy.

• Distillation in Finance: For decades, a large segment of the Indian population was “unbanked,” invisible to the formal financial system. Companies like CRED and Razorpay are acting as refineries. They analyse transaction data from UPI and credit cards to build sophisticated credit-scoring models. They can “distil” your payment history into a reliable measure of creditworthiness, offering loans to millions of new-to-credit individuals and small businesses that traditional banks would have rejected. The crude data of a digital payment is refined into the fuel of financial inclusion.

• Cracking in Agriculture: The agrarian sector, the backbone of India, is being transformed. Ninjacart, a B2B agri-tech platform, acts as a massive data refinery. It analyses data on crop yields, weather patterns, soil health, and real-time demand across cities. By “cracking” this complex dataset, it can predict exactly which vegetables will be needed in Bangalore tomorrow, instructing farmers in Tamil Nadu on what to harvest today. This reduces waste, increases farmer income, and stabilises prices—turning agricultural data into the fuel for a more efficient supply chain.

• Transformation in Healthcare: Startups like Practo and Tata1mg are refining the chaotic data of India’s healthcare system. They aggregate data on doctor availability, patient reviews, diagnostic test results, and medicine availability. This refined insight allows a user in a tier-2 city to find a specialist, book an appointment, get lab tests done, and order medicines seamlessly. The crude data of clinic schedules and medicine inventories is transformed into the fuel for accessible, efficient healthcare.

Fuelling a New Economic Engine

Just as oil powered the industrial revolution, data is fuelling India’s entrepreneurial and economic boom. The most valuable Indian startups are not in heavy industry, but in data-centric domains.

– Ola Cabs uses traffic, ride, and location data to optimise routes, set dynamic pricing, and even guide the development of its electric vehicles.

– Swiggy doesn’t just deliver food; it refines order data to predict demand, optimise delivery partner routes, and even advise restaurants on their menus, creating a hyper-efficient logistics network.

– Byju’s analyses student interaction data to personalise learning paths, identifying knowledge gaps and adapting content in real-time, refining clickstream data into the fuel for educational outcomes.

These companies, and hundreds like them, are the new economic giants, built not on physical assets, but on the refined fuel of data-driven insight.

The Spills and Fumes: Navigating the Ethical Landscape

The oil boom had its spills and pollution; the data boom has its own dark side, and India is grappling with these challenges in real-time.

– Data Spills (Breaches): The risk of data breaches is the equivalent of an oil spill. A leak of Aadhaar data or financial information could be catastrophic, eroding the very trust the digital economy is built upon.

– Data Smog (Privacy and Consent): The constant collection of data creates a “digital smog” of privacy concerns. When a kirana store owner starts offering you a loan based on your UPI history, it raises critical questions: Who owns this data? Was consent properly obtained? This led to the landmark Digital Personal Data Protection (DPDP) Act, India’s attempt to install safety valves and scrubbers in its data economy.

– Algorithmic Bias: If the refineries are flawed, the fuel is polluted. There is a real danger that algorithms could perpetuate societal biases. For instance, a lending app might unfairly deny loans to individuals from certain postal codes, creating a new form of digital discrimination.

Conclusion: Beyond the Analogy

The “data as the new oil” metaphor is compelling because it captures the essence of a resource-driven transformation. However, India’s journey shows one critical difference: oil is a finite resource that depletes with use. Data is an infinite resource that multiplies with use. Every transaction generates more data, which in turn improves the models, leading to better services, which then attract more users and generate even more data—a virtuous cycle of creation.

India is uniquely positioned in this new economy. It possesses a massive, diverse, and growing data oilfield, a young and tech-savvy population to build the refineries, and a regulatory framework that is evolving in real-time. The challenge is no longer about collecting the crude; it’s about building ethical, efficient, and innovative refineries. For India, data is not just the new oil; it is the national project of the 21st century, the fuel that will power its ascent on the global stage. The drilling has begun, the refineries are humming, and the nation is accelerating into a future built on bits and bytes.

About the Author:

Dr Abhijit Dasgupta is the Director of our Bachelor of Data Science program. His academic experience spans over 20 years at several prestigious institutions. He has also held various C-level positions in leading organisations such as Bennett Coleman, Future Group, Ernst & Young, and Price Waterhouse Coopers.

Liked this article? Continue reading more thought leadership pieces from SP Jain Global faculty here. Interested in data-driven careers? Explore our Bachelor of Data Science stories and insights here.