What has been missed is India’s digital sovereignty, Pg 12..

Key Highlights:

• India has reversed its position on key digital trade issues it previously defended at global forums, especially the WTO.
• The FTA prohibits India from demanding source code disclosure from foreign digital service providers, including for sensitive sectors.
• India agreed to provide non-discriminatory access to ‘Open Government Data’ to U.K. entities, risking national data sovereignty.
• The agreement reflects a lack of domestic policy preparedness and absence of a strategic digital roadmap.
• Digital provisions are considered permanent rule-setting mechanisms, unlike commodity tariffs which are adjustable.
• The United States has already withdrawn from similar digital trade commitments citing national security concerns.

Detailed Insights:

• Source Code Access Surrendered: India has forfeited the sovereign right to demand ex ante source code access for regulatory, safety, and security scrutiny. This affects sectors like AI, health tech, telecom, and critical infrastructure.
• Open Government Data Risk: Previously used for public transparency, open data now holds strategic economic and AI value. Sharing it without constraints enables foreign firms to develop AI products using Indian datasets.
• Data Localization & Free Flow: While India did not immediately give in on these fronts, it agreed to extend similar concessions to the U.K. in the future, if provided to others — effectively weakening its negotiating position.
• Digital Trade Rule-Making: Unlike tangible trade areas, digital trade rules shape global digital architectures. India risks becoming a passive participant rather than a sovereign digital rule-maker.
• Absence of Political Backing: The digital domain lacks a strong domestic political or industrial constituency, leading to oversight in safeguarding long-term interests.
• Strategic Incoherence: The agreement reflects India's reactive rather than strategic posture in global digital negotiations, despite ambitions of becoming a digital superpower.

Concepts Involved:

• Source Code Disclosure: The requirement for companies to share their software's codebase with regulators to ensure compliance, security, and safety.
• Open Government Data (OGD): Publicly accessible data generated by government agencies; now seen as a valuable resource for AI training and innovation.
• Digital Sovereignty: The principle that a country should maintain control over its digital infrastructure, data, and policymaking in the digital domain.
• Data Localization: A policy requiring data generated within a country to be stored and processed within its borders.