Data Bill may not lead to India joining e-commerce deal at WTO

India is unlikely to join the ongoing negotiations for a plurilateral deal on e-commerce at the World Trade Organization (WTO), notwithstanding a change in stance on data localisation and cross-border flow of data.

Under the new draft digital personal data protection (DPDP) Bill, put out on Friday for public consultation, the government has proposed free cross-border flow of data with ‘friendly’ nations, significantly easing its earlier stance on data localisation. India has so far stayed out of a group of 87 countries, including the US, European Union, China, and Japan that are negotiating trade-related aspects on e-commerce since December 2017.

In January 2019, members of the grouping agreed to “achieve a high standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible”. The issues on the table include prohibiting digital Customs duties, preventing localisation barriers, barring force technology (tech) transfers, protecting critical source code, ensuring tech choice and authentication methods, safeguarding network competition, preserving market-driven standardisation, global interoperability, and ensuring faster, more transparent Customs procedures.

“Apart from market access issues, the e-commerce joint statement initiative (JSI) is looking at free flow of data among members. But in line with the DPDP Bill, such data flow will be subject to notification of friendly countries. If we join the JSI, we have to notify all member countries as trusted partners, including China, which is not what India wants,” said a government official.

JSIs are broadly defined as a plurilateral negotiating tool initiated by a group of WTO members on certain issues without adhering to the rules on consensus decision-making of the multilateral body.

India and other developing nations have expressed concern over the introduction of new trade rules to the WTO framework surreptitiously through the JSI agreements despite not having the consent of all member nations.

India has so far maintained that attempts by developed countries to frame rules on e-commerce outside the WTO framework could undermine the consensus principle at the multilateral body, as there is an existing mandate for similar discussions to take place within the WTO. It has also maintained that since its e-commerce policy is still evolving, it cannot constrain its policy space by binding itself to a set of rules.

Rupa Chanda, an expert in services trade, however, said India should be seated at the e-commerce plurilateral negotiations whatever its concern may be.

“Because we are such a big market, people would like to invest in our market. We have players who can be exporters. So we should be shaping some of these discussions. Finally, what happens, we can see over time. But we should be party to those discussions,” she added.

THE ISSUE

• E-commerce joint statement initiative looks at free flow of data among members
• But such data flow will be subject to notification of ‘friendly’ countries
• If India joins the initiative, it has to notify all member countries as trusted partners, including China, which is not what India wants