The export value of virtual goods and services, enabled by the digital economy, could grow to $197 bn by 2030
Most Indian businesses are yet to tap the export opportunity, with about 9% of businesses currently engaged in exporting, compared with China’s 21%, says a report
NEW DELHI :
The benefits of digital trade to the Indian economy could grow 14-fold from $35 billion now to $512 billion by 2030, if India dismantles barriers to digital trade and fully enables cross-border data flow, according to a report released on Thursday by the All India Management Association (AIMA) and Hinrich Foundation.
The Digital Trade Report added that the export value of virtual goods and services, enabled by the digital economy, such as e-commerce, could grow more than three times from the current $58 billion to $197 billion by 2030. “To maintain and even enhance this strong performance, India’s strategy in its export markets must be supported by greater cross-border data exchanges, processing and storage," the report said.
It maintained that India has a number of opportunities to enhance its current domestic regulatory approach to data. “There is currently no overarching data protection legislation in India, but instead, there are a number of sector-specific regulations. Current rules limit the transfer abroad of personal data deemed ‘sensitive’," the report said.
India is contemplating an umbrella legislation on data protection. A 10-member expert group headed by former Supreme Court judge B.N. Srikrishna had submitted the draft Personal Data Protection Bill, 2018, to the ministry of electronics and information technology last July. The committee has recommended setting up of a data protection authority and placing restrictions on cross-border data flows.
The report said there is an 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. “There is a considerable opportunity to improve transparency on data management requirements across Asia and to identify areas to enhance performance. Clarity is required around the type of data that can be shared, the boundaries of sharing, and the type of consumer consent that is required," it said.
The report suggested that a useful first step would be for countries to adopt the APEC (Asia-Pacific Economic Cooperation) Privacy Framework and join the APEC Cross Border Data Privacy Rules System, besides adopting ISO Standards, which specify controls to protect personal data.
India is also opposed to joining any global deal on e-commerce with Prime Minister Narendra Modi refusing to sign the Osaka Track, an overarching framework promoting cross-border data flow, at the G-20 summit last month.
The report said most Indian businesses are yet to tap the export opportunity, with about 9% of businesses currently engaged in exporting, compared to China’s 21%. “Many businesses, particularly small and medium enterprises (SMEs), still face substantial challenges to bridge the gap to global markets. They often lack the resources to research international sales opportunities, build global business networks and promote their products overseas," the report said. Nevertheless, digital adoption is relatively advanced in India. “According to the United Nations Industrial Development Organization (UNIDO), over 27% of Indian businesses receive orders on the internet. There is thus much potential for exporters to make use of this opportunity to sell abroad," the report added.
Rekha Sethi, director general of AlMA, said the growing digital flows are changing the manner and content of trade. “Internet of Things and 5G networks will multiply data flows in the future. Already, digitally-enabled trade in services is growing fast, and even the goods trade is being powered by data. India’s digital trade is set for rapid growth, provided India can create an enabling policy environment," she added.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!