**Executive Summary**
This report addresses Lok Sabha Unstarred Question No. 6013 regarding the reconciliation of India’s digital trade commitments under the United States-India Joint Statement with domestic data localization and regulatory autonomy. It highlights the framework of the ongoing India-US Bilateral Trade Agreement (BTA) and the implementation of the Digital Personal Data Protection (DPDP) Rules 2025. The document emphasizes that while India seeks to reduce trade barriers, it maintains its right to regulate critical data and sensitive infrastructure.
**Key Points / Main Content**
**Economic Significance of Digital Trade**
* India’s IT ecosystem generated over 280 billion USD in revenue with exports reaching 225 billion USD in FY 2024-25.
* The sector provides employment to more than 60 lakh individuals, making digital trade a vital component of the national economy.
**International Trade Agreements**
* India has concluded Free Trade Agreements (FTAs) with the United Arab Emirates, the United Kingdom, and the European Union.
* Each of these agreements includes a specific Digital Trade Chapter designed to secure market access while safeguarding national interests.
* The India-US Bilateral Trade Agreement (BTA) is currently under negotiation, with an established framework for an Interim Agreement to promote reciprocal digital trade guidelines.
**Regulatory Autonomy and Data Governance**
* The Government maintains that international agreements do not restrict India’s ability to manage domestic data within its legal framework.
* India preserves regulatory autonomy to advance emerging technologies and promote strategic digital autonomy for indigenous AI development.
**Legal and Sectoral Frameworks**
* **DPDP Act 2023:** Establishes obligations for Data Fiduciaries regarding lawful processing and grants enforceable rights to citizens.
* **DPDP Rules 2025:** Provides the comprehensive framework for personal data processing and cross-border transfers.
* **Cross-Border Restrictions:** The Central Government retains the power to prescribe additional conditions or restrictions on the transfer of specific categories of personal data.
* **Sector-Specific Mandates:** Regulators like the Reserve Bank of India (RBI) continue to mandate that all payment system data must be stored exclusively within India.
**Impact Analysis**
**Government of India and Sectoral Regulators**
**Impact**
The government retains the legal authority to mandate data localization and restrict cross-border data flows despite international trade commitments.
**Action Required**
Continue to define "critical" data categories and enforce sector-specific storage mandates (e.g., RBI's payment data rules) where necessary.
**Data Fiduciaries (Private and Public Entities)**
**Impact**
Entities processing personal data are subject to the obligations set forth in the DPDP Act 2023 and the DPDP Rules 2025.
**Action Required**
Ensure lawful processing of data, adhere to protection standards, and comply with any government-imposed restrictions on cross-border data transfers.
**IT and Digital Trade Industry**
**Impact**
The industry stands to benefit from increased market access and a "free, fair, and dynamic" digital environment through the India-US BTA and other FTAs.
**Action Required**
Align business strategies with the evolving digital trade chapters in FTAs and the forthcoming India-US BTA guidelines.
Key Entities Referenced
Digital Personal Data Protection Act, 2023: India's primary legislative framework establishing data privacy rights and obligations for personal data processing.
India-US Bilateral Trade Agreement (BTA): A trade framework under negotiation aimed at fostering digital trade collaboration and reciprocal guidelines between India and the United States.
Digital Personal Data Protection (DPDP) Rules, 2025: The regulatory framework governing personal data processing and conditions for cross-border data transfers.
United States–India Joint Statement: A diplomatic commitment to reduce digital trade barriers while maintaining India's strategic digital autonomy.
Reserve Bank of India (RBI): The sector regulator that mandates the exclusive domestic storage of all payment system data within India.
GOVERNMENT OF INDIA
MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY
LOK SABHA
UNSTARRED QUESTION NO. 6013
TO BE ANSWERED ON: 01.04.2026
UNITED STATES- INDIA JOINT STATEMENT
6013. SHRI RAHUL GANDHI:
Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to
state:
(a) the manner in which the Government reconciles its commitment under the United States–
India Joint Statement to “reduce barriers to digital trade” with India’s data localisation rules,
cross-border data regulations and broader digital framework;
(b) whether any policy changes are proposed to protect regulatory autonomy;
(c) if so, whether these commitments could restrict India’s ability to mandate local storage of
critical data, limit foreign access to sensitive digital infrastructure or regulate Artificial
Intelligence (AI) now or in the future;
(d) if so, details of critical infrastructure —such as financial systems, digital identity, health
and welfare databases, telecom networks and AI datasets—are affected and to what extent and
if not, the reasons therefor; and
(e) the details of the safeguards ensuring these commitments do not weaken India’s ability to
use domestic data for indigenous AI development, domestic value creation and strategic digital
autonomy particularly regarding data localisation, market access conditions, cross-border
restrictions and technology transfer?
ANSWER
MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY
(SHRI JITIN PRASADA)
(a) to (e): India has a vibrant IT ecosystem with revenues exceeding 280 billion US Dollars
and exports of 225 billion US Dollars in FY 2024-25. It employs more than 60 lakh people.
Therefore, digital trade is an important component of India’s economy.
India’s Free Trade Agreements:
Government of India is firmly committed to fostering and expanding digital trade partnerships
with potential nations across the world. India has concluded three Free Trade Agreements with
United Arab Emirates, United Kingdom, and the European Union, each of which includes a
Digital Trade Chapter as a key component.
In these agreements, India has effectively safeguarded its interests while securing market
access.India-US Trade negotiations:
The India-US Bilateral Trade Agreement (BTA), currently under negotiations, seeks to foster
a free, fair, and dynamic digital environment, enabling deeper collaboration in the field of
Digital Trade.
India and the United States have established a framework for an Interim Agreement that
reflects both nations' shared commitment to fostering an open, and equitable digital trade
environment.
This interim framework charts a pathway toward achieving reciprocal and mutually beneficial
digital trade guidelines as a vital component of the India-US BTA.
India has preserved its regulatory autonomy in data governance, while striking a careful
balance between advancing emerging technologies and promoting cross-border cooperation.
In no way, such agreements restricts India’s ability to take measures for managing India’s own
data within the established legal framework.
India’s robust legal framework:
Digital Personal Data Protection Act, 2023 establishes a strong data privacy framework. It
places corresponding obligations on Data Fiduciaries to ensure lawful processing and
protection of personal data. The Act empowers citizens by giving them rights enforceable
against the Data Fiduciaries.
Government of India notified the Digital Personal Data Protection (DPDP) Rules 2025 to
provide a comprehensive framework for the processing of personal data, including cross-
border transfers.
The framework enables the Central Government to prescribe additional conditions, including
restrictions on the transfer of certain categories of personal data under limited circumstance,
where necessary.
Similarly, sector regulators are prescribe mandate by considering the criticality of the sector.
E.g. Reserve Bank of India (RBI) mandates that all Payment System Data must be stored
exclusively on systems located within India.
Government remains steadfast in its commitment to advancing India's digital economy, while
ensuring that domestic regulatory autonomy is preserved and strengthened.
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