According to a joint report by All India Management Association (AIMA) and the Hinrich Foundation, India’s second biggest export sector by value is digital or virtual goods. The export value of virtual goods and services enabled by the digital economy, such as e-commerce, account for USD 58 billion today.
The report titled, ‘The Data Opportunity: The Promise of Digital Trade for India,’ said the impact of digital trade on India’s domestic economic is to the tune of Rs 226,000 crore (USD 35 billion).
“By 2030,” it said, “the potential for digital trade will enable an estimated Rs 3,331,000 crore (USD 512 billion) of economic impact within the domestic economy.”
“The digital economy holds immense promise for sustaining India’s incredible run of recent economic growth and addressing the various socioeconomic challenges facing the economy, including helping large segments of the population struggling to meet basic food, water, energy and sanitation needs,” the report said.
Enabled by cross-border data flows, digital trade allows Indian firms to achieve cost efficiencies (e.g., from storage of data), enter new markets and generate richer insights from data.
While India is tightening norms around cross-border transfer of digital data, the report says countries should reduce barriers for digital trade to prosper.
“Policymakers in India and across Asia Pacific are rushing to develop regulations for the digital economy. Good regulatory frameworks are essential to address issues related such as privacy and cyber security. But many countries are adopting digital trade rules that could undermine the digital trade opportunity for India. Issues such as imposing undue red tape on digital enterprises, restricting cross-border data flows, and providing imbalanced copyright and intermediate liability regulations, need to be addressed.”
“There is the opportunity for India to play a leading role, not only at home, but also abroad in pushing for facilitative digital trade rules in its various bilateral and multilateral trade negotiations.”