Microsoft Blocks Nayara Energy Data Access in India

By Pune Media On Aug 1, 2025

Nikhil Pahwa’s Take:

Microsoft blocking Nayara’s access to its own data in India should be a warning sign for India. This constitutes a sovereignty risk. Two things to keep in mind:

The US Reforming Intelligence and Securing America Act’ (RISAA) enables the US government to access data stored with cloud services and data centres run by US companies anywhere. Is Azure providing cloud services to the Indian government? We shouldn’t be hosting any govt data with Microsoft, AWS or Google cloud.
Given the manner in which Microsoft has shut down data access for Nayara, India needs to de-risk its government operations by switching to open source services. How many government computers use the Microsoft operating system, and Microsoft Office 365? Time to switch. Kerala has led the way here and it’s time the central and other state governments followed suit.

What’s the News:

On July 22, 2025, Microsoft abruptly suspended IT services, including access to its own data, to Nayara Energy, India’s second-largest private oil refinery, without prior notice. Nayara said that the suspension disrupted essential business operations, cutting off access to Outlook email, Microsoft Teams, and other cloud services the company had subscribed to.

Microsoft stated that it had blocked the access to comply with the European Union’s 18th sanctions package against Russia, which was announced on July 18, 2025. According to Russia-based Rosneft’s website, it holds a 49.13% stake in Nayara Energy. In a press release, Nayara Energy condemned the EU sanctions, calling their actions “unjust and unilateral.”

However, just before the hearing in the Delhi High Court on July 30, Microsoft restored all services, leading the judges to dispose of the case.

What are Nayara’s Accusations Against Microsoft?

Citing “dangerous corporate overreach,” Nayara Energy filed a petition in the Delhi High Court on July 28, 2025, seeking an interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996. Senior Advocates Rajiv Nayar and Dayan Krishnan, representing Nayara, argued that Microsoft’s unilateral action violated contractual terms and lacked legal basis under Indian and U.S. law.

In its petition, Nayara accused Microsoft of imposing foreign legal frameworks in jurisdictions where they do not apply. The energy firm warned that the move set a “dangerous precedent for corporate overreach” and asserted that Microsoft, being a US-based company, had no legal obligation to enforce sanctions mandated by the European Union against India-based Nayara.

Justice Purushaindra Kumar Kaurav disposed of the petition in Nayara’s favor after Microsoft restored the services.

India’s Time to be Truly Self-reliant.

During these service disruptions, Nayara Energy sought alternative IT solutions and reportedly relied on Indian firm Rediff.com for communication services temporarily. However, these alternatives could not restore the data and emails stored on Microsoft’s servers.

This has triggered a debate over India’s digital dependency on foreign tech firms. Retired Indian Army Colonel Hunny Bakshi raised concerns about depending on foreign technology. “Now just think, it’s a hot war situation. Our total reliability on the foreign operating system… Your entire ICT goes phuttt,” he wrote on X.

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Elsewhere, Prathamesh Godbole responded, noting that Indian companies like Zoho exist as alternatives to US-based firms.

MediaNama’s Editor, Nikhil Pahwa, also pointed out the security risks that non-US nations face under the ‘Reforming Intelligence and Securing America Act’ (RISAA). In matters related to “national security,” this act mandates that American companies are required to share user information without any consent or notice. This means that the US government can demand user information from US-based companies like Amazon Web Services, Google Cloud, and Microsoft Azure, which are widely used in both the private and public sectors in India.

Microsoft blocking Nayara Energy’s access to its own data in India, because it has a Russian investment, should be a warning sign for India… this constitutes a sovereignty risk from US based tech companies like Microsoft. @AshwiniVaishnaw should look into this risk seriously.…

— Nikhil Pahwa (@nixxin) July 30, 2025

Alternatively, Pahwa suggested open-source models as a solution to reduce reliance on American technologies. He referred to Kerala’s adoption of open-source technology as a successful example. During the COVID-19 lockdown, Kerala Infrastructure and Technology for Education (KITE) adopted a free and open-source software (FOSS), BigBlueButton, for e-learning and online classes. Similarly, in 2014, Kerala also adopted open-source software in its legislative assembly.

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