Context: India-UK Free Trade Agreement (FTA)

The recently concluded India–United Kingdom Free Trade Agreement (FTA), formally titled the Comprehensive Economic and Trade Agreement (CETA), has been widely praised as a model for future trade deals.
While the Indian government has assured that critical sectors like agriculture and labour-intensive manufacturing remain protected, there has been little attention—both officially and in media discourse—to the digital sector, which holds immense strategic importance for India’s national growth and autonomy.

This omission raises concerns over the long-term implications of the FTA for India’s digital sovereignty—its ability to independently govern its digital infrastructure, data, and technology.

Key Digital Concessions in the India–UK FTA

1. Reversal on Source Code Disclosure

• India has surrendered its right to demand pre-emptive access to source code from foreign digital service providers.
• This is a major policy reversal from India’s longstanding stance at international forums like the World Trade Organization (WTO), where it supported the regulatory right to inspect source codes to ensure security, compliance, and safety, especially in sensitive sectors like telecom, AI, and healthcare.
• Ironically, even the United States, a global advocate for banning source code disclosures in trade pacts, has recently begun moderating its position to align with domestic regulatory needs.
• India’s move is thus not only unaligned with global trends but weakens its digital regulatory autonomy.

Misuse of Open Government Data Provisions

• The FTA includes a commitment to non-discriminatory access for UK entities to India’s “Open Government Data.”
• Traditionally, this term meant access to public statistics and transparency-related datasets, but in the digital age, government-held data has evolved into a strategic economic and technological asset, particularly for AI development.
• By offering access to this data, India risks:
• Compromising national security;
• Losing competitive advantage in emerging technologies;
• And setting a precedent that treats sovereign data as a tradable commodity.
• Though the clause is non-binding, it may erode India’s ability to control or restrict access in future agreements.

Undermining Future Data Policy through Consultative Clauses

• The FTA does not fully concede on critical digital issues such as data localisation or the free flow of data, but it does include a clause that requires India to consult the UK if similar concessions are granted to other nations.
• This clause creates diplomatic and policy constraints, weakening India’s negotiating leverage in future trade talks.
• The inclusion of such a clause reflects a gradual shift away from India’s assertive digital policy, especially at a time when countries like the U.S. are recalibrating towards digital protectionism due to growing geopolitical and technological concerns.

Lack of Political Advocacy for Digital Sovereignty

• A key reason for these digital concessions is the absence of a strong political constituency for digital sovereignty in India.
• Unlike sectors like agriculture or manufacturing, which have well-organized interest groups and vocal political support, the digital domain lacks:
• Widespread public awareness,
• Political urgency,
• Or stakeholder resistance to foreign influence.
• This vacuum has enabled far-reaching digital trade concessions without national debate or scrutiny.
• The article warns that, much like how colonial-era trade exploited India’s natural resources, the nation now risks becoming a "data colony"—supplying raw data to foreign tech giants without having the domestic capacity to benefit from it.

Way Forward: Developing a Strategy for Digital Sovereignty

To prevent further erosion of its digital autonomy, India must urgently:

• 1. Formulate a Comprehensive Digital Sovereignty Policy

• This policy must define:
• Strategic red lines in digital trade,
• Rules around data governance,
• And guidelines for digital industrialisation.
• It should act as a blueprint for future trade negotiations involving digital issues.

• 2. Institutionalise Expert Input in Trade Talks

• Digital policy experts, especially those specialising in tech, law, cybersecurity, and geopolitics, must be:
• Included in trade negotiation teams;
• Given direct access to senior political leadership;
• And consulted regularly to ensure national interests are protected.

Conclusion

The India–UK FTA marks a critical turning point in India’s digital journey—not for its traditional trade clauses, but for what it quietly concedes in the digital domain.
India’s decision to step back from core principles such as source code access and data sovereignty risks:

• Undermining its control over its digital ecosystem,
• Weakening its position in future trade negotiations,
• And allowing foreign entities to shape India’s digital future.

Without immediate course correction and a clear digital sovereignty framework, India may find itself relegated to the role of a passive data supplier, rather than an active digital superpower in the 21st-century global order.