Context

• The India-United Kingdom Free Trade Agreement (FTA), officially referred to as the Comprehensive Economic and Trade Agreement (CETA), has been hailed as a model for future trade negotiations.
• While the government has emphasised that no sensitive sectors, such as agriculture and labour-intensive manufacturing, were compromised, a critical area has been notably ignored in both official commentary and media scrutiny, India’s digital sector.
• Given the pervasive and strategic importance of digital infrastructure to national growth, this oversight raises serious concerns about the long-term consequences of the FTA on India's digital sovereignty.

Troubling Concessions in the India-UK FTA

• India’s Strategic Reversal on Source Code Disclosure
  • One of the most controversial concessions in the FTA involves India’s abandonment of its sovereign right to demand ex ante access to source code from foreign digital service providers.
  • This move represents a dramatic reversal from India’s previous consistent stance at international forums like the World Trade Organization (WTO).
  • Traditionally, India upheld the right of regulators to inspect software source code pre-emptively to ensure compliance, security, and public safety, especially given the increasing integration of software into critical sectors like telecom, health, and artificial intelligence.
  • Remarkably, even the United States, a pioneer in imposing source code disclosure bans in trade agreements, has recently softened its stance, acknowledging domestic needs for regulation and law enforcement.
• Open Government Data: Misinterpreted and Misused
  • Another alarming concession is India’s agreement to provide non-discriminatory access to its 'Open Government Data' to U.K. entities.
  • Historically, this term referred to transparency and the sharing of public statistics.
  • However, in the digital era, data has transformed into a vital economic and strategic resource, especially with the advent of artificial intelligence.
  • Data-driven patterns and algorithms are now the bedrock of technological innovation and global competitiveness.
  • By opening government-held data to foreign players, India risks forfeiting its competitive edge in building indigenous AI technologies and jeopardizes national security.
  • Even if the provision is currently non-binding, it sets a dangerous precedent that undermines the conceptualization of data as a sovereign asset.

A Troubling Precedent in Data Policy

• Though India appears to have maintained its positions on contentious issues like the free flow of data and data localisation, the inclusion of a clause to consult the U.K. if India provides similar concessions to other nations signals a softening of its stance.
• This clause introduces uncertainty and weakens India’s negotiating power in future trade agreements.
• The risks here extend beyond commerce to touch upon national autonomy in rule-making for digital ecosystems.
• The U.S., once the strongest advocate of unrestricted data flows, has already backtracked, recognising the need for digital protectionism in the face of geopolitical and technological shifts.
• India's concessions, in contrast, reveal a lack of strategic foresight, undermining its ability to influence or resist emerging global digital norms driven by Western Big Tech interests.

The Lack of a Political Constituency for Digital Sovereignty

• Unlike agriculture and manufacturing, the digital sector lacks a clear and vocal political constituency in India.
• This absence has allowed sweeping concessions to be made without public debate or political resistance.
• Yet, digital sovereignty is arguably even more crucial in the long run, as it shapes the infrastructure for economic independence and innovation in the 21st century.
• Just as the subcontinent was once exploited during the industrial revolution, it now faces the risk of becoming digitally colonised, serving as a data mine for global powers while lacking the tools to harness this resource for its own development.

The Path Forward: Formulating a Digital Sovereignty Strategy

• To safeguard its digital future, India must urgently develop a robust digital sovereignty and digital industrialisation policy.
• Such a framework should define the nation’s strategic priorities and provide a blueprint for trade negotiations involving digital sectors.
• These talks must be informed not only by commercial considerations but also by expert insights into technology, regulation, and geopolitics.
• Digital sovereignty experts should be included in negotiation teams and have direct access to senior political leadership to ensure long-term national interests are adequately represented and protected.

Conclusion

• The India-U.K. FTA marks a troubling moment in India's digital journey, not for what it includes about traditional trade, but for what it silently concedes in the digital realm.
• The agreement represents a deviation from India’s previously consistent positions on digital rights, source code disclosure, and data sovereignty.
• If left unaddressed, these concessions could severely limit India's ability to assert control over its digital ecosystem.
• India must act quickly, not only to mitigate the damage but to chart a proactive course toward becoming a digital superpower rather than a passive consumer in a global digital order crafted by others.