Context
India’s digital trade compact with the UK (Chapter 12 of India–UK CETA) marks a major step in global digital economy integration.
It balances market access vs. regulatory oversight, raising debates on digital sovereignty, credibility, and evolving risks.
The Digital Wins
Recognition of electronic signatures & contracts → reduces paperwork & barriers for SMEs.
Paperless trade & e-invoicing → easier cross-border documentation & payments.
Zero customs duties on electronic transmissions → saves ~$30 bn annually.
Pilot projects in regulatory sandboxes → boost innovation credibility.
Wider trade gains: The India–UK deal is expected to enhance merchandise exports (textiles, auto parts, and IT hubs).
Opens British public procurement for Indian IT suppliers → predictable trade corridor.
The Digital Costs
Critics: India dropped source-code checks as a default safeguard.
A ban on code inspection may weaken regulatory oversight.
Government procurement excluded from digital trade → access to sensitive systems limited.
No legally binding rule on government data disclosure → India retains discretion.
Domestic foundations like the Digital Personal Data Protection Act 2023 still await full implementation.
Steps to Safeguard Sovereignty
Integrate market openness with regulatory oversight.
Accredit trusted labs for source-code audits.
Mandate audit trails for cross-border data flows.
Institutionalize broad-based pre-negotiation consultations.
Schedule 3-yearly reviews to align with rapid AI/data changes.
Significance
Reflects India’s shift from trade skepticism to strategic engagement.
Anchors India’s role in shaping the global digital economy.
Ensures balance between growth & data sovereignty.
Bottom Line:
The India–UK digital trade compact offers big economic gains but must be guarded by robust data governance & regulatory safeguards to protect sovereignty while expanding global reach.
