Microsoft announced on Wednesday that it will begin offering in-country data processing for Indian users of Microsoft 365 Copilot by the end of 2025, allowing customer data to be collected, stored, and processed within India’s borders.
India is among the first four markets globally to receive this feature, along with Australia, the United Kingdom, and Japan.
Paul Lorimer, Corporate Vice President of Office 365 Enterprise and Cloud Engineering at Microsoft, said in a blog post that data sovereignty is central to building trust in AI systems.
“As every organisation evolves to become a Frontier Firm — human-led, agent-operated — trust is the foundation that powers AI transformation for governments and enterprises worldwide. Where and how data is processed and stored by AI-powered services helps strengthen that trust,” Lorimer said.
The company will expand the feature to 14 additional countries — including Canada, Germany, Italy, Malaysia, Poland, South Africa, Spain, Sweden, Switzerland, the UAE, and the United States — by the end of 2026.
According to Microsoft, the initiative aims to help governments and highly regulated sectors adopt Microsoft 365 Copilot while ensuring stronger governance, security, and compliance with local regulations.
“With in-country processing, Copilot interactions are handled in data centres within a nation’s borders, giving customers greater control over their data and potentially improving performance by reducing latency,” Lorimer explained.
Microsoft 365 is a cloud-based subscription suite offering productivity tools such as Word, Excel, PowerPoint, Outlook, and OneDrive.
The move reflects a growing trend among global tech firms to enable local data residency and processing, aligning with national data protection laws and sovereignty concerns.
Earlier in May, OpenAI, in which Microsoft holds a 27 per cent stake, announced that it would begin storing data for Indian users of ChatGPT Enterprise, ChatGPT Edu, and the OpenAI API platform within India to help businesses meet local data sovereignty norms.