Digital trade an important component of India’s economy

**Executive Summary** This report details the Government of India’s strategic efforts to expand digital trade through international partnerships and robust domestic legislation as of April 2026. It highlights the conclusion of Free Trade Agreements (FTAs) with the UAE, UK, and EU, alongside ongoing negotiations with the United States to secure market access while preserving regulatory autonomy. Key focus areas include the implementation of the Digital Personal Data Protection (DPDP) Rules 2025 and the economic importance of an IT ecosystem that employs over 60 lakh people. **Key Points / Main Content** **Economic Significance** * India’s IT ecosystem recorded revenues exceeding $280 billion and exports of $225 billion in FY 2024-25. * The sector is a critical economic driver, providing employment to more than 60 lakh individuals. **International Trade and Agreements** * **Concluded FTAs:** India has finalized Free Trade Agreements with the United Arab Emirates, United Kingdom, and the European Union, each containing a dedicated Digital Trade Chapter. * **India-US Negotiations:** A Bilateral Trade Agreement (BTA) is currently being negotiated to foster a "free, fair, and dynamic" digital environment. * **Interim Framework:** India and the US have established an interim framework to create reciprocal and mutually beneficial digital trade guidelines. * **Sovereignty in Trade:** These agreements are structured to safeguard India's interests, ensuring they do not restrict the nation's ability to manage data within its own legal framework. **Domestic Legal Framework** * **DPDP Act, 2023:** Establishes a privacy framework that grants citizens enforceable rights and places strict obligations on Data Fiduciaries for lawful data processing. * **DPDP Rules 2025:** Notified to provide a comprehensive framework for personal data processing and cross-border transfers. * **Regulatory Restrictions:** The framework allows the Central Government to impose conditions or restrictions on the transfer of specific data categories. * **Sector-Specific Mandates:** Regulators like the Reserve Bank of India (RBI) require that all Payment System Data be stored exclusively on systems located within India. **Impact Analysis** **Indian IT and Export Sector** **Impact** The sector benefits from secured market access in the UAE, UK, and EU, and potential growth through the upcoming India-US BTA. **Action Required** Businesses must align their operations with the specific Digital Trade Chapters included in new FTAs to maximize export opportunities. **Data Fiduciaries (Data-handling Entities)** **Impact** Entities are subject to mandatory obligations regarding the protection and lawful processing of personal data under the DPDP Act and Rules. **Action Required** Fiduciaries must ensure compliance with the DPDP Rules 2025 and adhere to sectoral mandates, such as the RBI’s local data storage requirements for payment systems. **Indian Citizens** **Impact** Citizens are empowered with enforceable rights against Data Fiduciaries regarding their personal information. **Action Required** Citizens may exercise their legal rights to ensure their personal data is protected and processed lawfully. **Central Government and Regulators** **Impact** The government maintains regulatory autonomy to manage data and prescribe conditions for cross-border data flows. **Action Required** The government must continue to monitor and prescribe additional conditions or restrictions on data transfers where necessary to protect national interests.

Key Entities Referenced