Trade Win No. 5
TIME TO SECURE A PREDICTABLE DIGITAL TRADE REGIME IN INDIA | Arpita Mukherjee
India has emerged as one of the world's leading exporters of digitally delivered services (DDS), shifting its interests from preserving domestic policy space to shaping the rules governing digital trade. As a major beneficiary of open digital markets, India now stands to gain more from participating in global digital trade rulemaking—including potentially through the WTO E-Commerce Agreement (ECA)—than from remaining outside it.
India’s DDS export success depends on an open digital trade regime
India was the fourth largest exporter of DDS, after the U.S., the UK and Ireland, with exports reaching USD328 billion in 2025. India’s DDS export growth rate outpaced not only the global average but also that of major regions like North America and the EU. India has maintained a consistent trade surplus in DDS since 2005, with exports growing nearly seven-fold during 2005-2025. The share of computer services and other business services in India’s total DDS exports was higher than their corresponding share in global DDS exports in 2025, reflecting India’s comparative advantage in these sectors. The large pool of English-speaking skilled workers, together with initiatives like Digital India and the promotion of Global Capability Centres (GCCs) supports this growth. India had over 1,800 GCCs in the financial year (FY) 2024, which is projected to become more than 2,100 GCCs by 2030. The growth of DDS exports highlights both the integration of Indian firms into global digital value chains and the need for a predictable international digital trade regime.
DDS exports depend on an open digital trade regime that supports cross-border data flows, facilitates trusted data sharing, maintains the moratorium on customs duties, and balances national security and consumer protection concerns. With growing global trade protectionism, tariff threats and restrictions on cross-border data flows, it is in India’s interest to push for removal of trade barriers to DDS. As India's exposure to digital trade grows, so does its interest in preserving an open and predictable digital trading system. By remaining outside the ECA, India risks being excluded from global digital trade rulemaking and not securing a liberal trade regime for its exporters, especially SMEs.
So far, India has been able to sustain a high growth of DDS, without joining the ECA, by being an active participant and a promoter of the rule-based trading system under the WTO’s Work Programme on Electronic Commerce (WPEC), through which it has pushed for a liberal Mode 1/cross-border trade in services regime. While at times it raised concerns about revenue losses for developing countries from the e-commerce moratorium, it has never blocked the temporary extension of the moratorium. Along with this, digital trade has been a core component of India’s trade agreements. Thus, India has successfully expanded exports under existing WTO disciplines and bilateral market access arrangements; the U.S.—India's largest market for DDS exports—is not a member of the ECA; therefore, ECA membership may not be a prerequisite for DDS exports.
India as global rule maker: The road ahead
India has traditionally supported the multilateral process over plurilateral agreements, and there are legitimate concerns in the country that ECA provisions could constrain future regulatory flexibility in areas like data governance, privacy, competition policy, and digital taxation, where domestic policies are still evolving. There are also concerns regarding custom duty losses, and scope and coverage of e-commerce. At the same time, India is implementing some provisions of the ECA through its FTAs with trade partners like the EU and the UK, which shows its interest in securing predictable digital trade rules with export markets.
India's digital services success does not erase valid concerns about regulatory autonomy or prove that ECA membership is essential for export growth. However, as digital services drive India's competitiveness, staying outside trade rulemaking will become more costly. The strategic question is no longer whether India should shape these rules, but how it can do so while protecting domestic policy space. Ultimately, India's export interests favor active participation in digital trade rulemaking, including eventual ECA membership.
