By: Krishnaveni Palanivelu
Cybersecurity has become one of the defining economic risks of the digital age. As economies rely more heavily on interconnected digital systems, cyber incidents now carry consequences that extend far beyond data loss or temporary outages. Attacks on financial networks, energy infrastructure, healthcare systems, and supply chains increasingly resemble economic shocks disrupting markets, eroding confidence, and imposing long-term costs on governments and businesses alike. Disruptions to energy distribution have triggered shortages and price volatility. Attacks that disrupt hospital operations or compromise sensitive data impose direct financial costs while undermining public trust. Supply chain compromises — difficult to detect, slow to remediate, and costly to recover from — have quietly embedded vulnerabilities into widely used software, affecting thousands of organizations at once.
Yet cybersecurity policy has struggled to keep pace with this reality. In many countries, cyber risk is still treated primarily as a technical or defense issue, rather than as a central component of economic security. That gap matters. Ransomware campaigns, supply chain compromises, and state-sponsored cyber operations are no longer isolated events; they are tools that can be used to exert economic pressure without crossing traditional military thresholds. Emerging technologies further complicate the threat environment. Artificial intelligence enables attackers to automate reconnaissance, generate more convincing social engineering campaigns, and accelerate exploitation. As digital systems grow more autonomous, the speed of cyber incidents increasingly outpaces traditional governance and response mechanisms.
The problem is compounded by fragmented governance among democratic states. Their dependence on digital systems creates a difficult trade-off. Openness, private-sector innovation, and global integration drive growth, but they also expand the attack surface. Meanwhile, democratic governance remains deeply fragmented. Approaches to cybersecurity regulation, data protection, and critical infrastructure security vary widely across jurisdictions. In practice, it complicates cross-border incident response, slows information sharing, and raises compliance burdens for multinational firms.
Cyber adversaries ranging from criminal syndicates to state-backed groups have learned to exploit this asymmetry. Criminal groups operate increasingly professionalized ransomware and extortion enterprises, often targeting sectors critical to economic continuity. At the same time, state-sponsored cyber operations are blurring the line between traditional espionage and deliberate economic disruption. Attacks on intellectual property, research institutions, and strategic industries aim to erode competitive advantage rather than extract immediate financial gain. In some cases, cyber activity supports broader geopolitical objectives by signaling power, shaping perceptions of vulnerability, or testing crisis response mechanisms. Meanwhile, authoritarian technology models emphasize centralized control and rapid state intervention, often portraying themselves as more decisive in the face of digital threats. While such approaches come at the expense of privacy and civil liberties, their apparent efficiency can seem appealing, particularly for governments under pressure to deliver rapid digital growth.
Cybersecurity must be treated as a shared economic security challenge. It also demands collective action. The United States and India occupy a particularly important position in this landscape. Both are major digital economies with growing strategic alignment, deep technology sectors, and shared interests in a stable, open digital order. Collaboration can span threat intelligence sharing, supply chain security, workforce development, and joint capacity-building initiatives. They and other democratic partners should work toward shared baseline standards for cyber resilience in critical sectors; trusted mechanisms for information sharing; joint investment in secure digital infrastructure; support secure cloud services, telecommunications, and workforce development; and align incident response and crisis coordination. Multilateral frameworks can support alignment on minimum security standards, coordinated incident response exercises, and investment in secure digital infrastructure across partner nations. Importantly, democratic cooperation must extend beyond governments. Since the private sector owns and operates much of the digital infrastructure on which economies depend, effective policy must foster trusted public–private partnerships that encourage information sharing while protecting commercial and civil liberties. By aligning standards, strengthening cooperation, and embedding cyber resilience into trade, infrastructure, and foreign policy, democracies can better protect their digital foundations and sustain long-term economic stability.
For the United States, deeper cybersecurity cooperation with India is not simply a diplomatic gesture; it is a practical economic and security necessity. India plays a central role in global digital supply chains, serving as a major hub for software development, cloud services, and managed IT operations that support U.S. firms across finance, healthcare, energy, and technology. Weaknesses in India’s digital ecosystem can therefore spill over into systemic risks for the U.S. economy. Cooperation also strengthens Washington’s ability to shape global cyber norms at a moment when more authoritarian models of digital governance are gaining ground. At the operational level, joint efforts in threat intelligence sharing, workforce development, and supply chain security extend U.S. defensive capacity and reduce pressure on domestic institutions. In this light, U.S.–India cooperation functions as a force multiplier for American economic security.
Krishnaveni Palanivelu works in the financial services industry, with experience securing large-scale financial services platforms.