The digital trade sector in India is poised to significantly impact the country’s economic landscape up until 2030. This forecast was recently highlighted in a report by the Hinrich Foundation and the All India Management Association (AIMA). This article lays out the expected milestones, major challenges, and necessary steps for India to fully reap the potential benefits of digital trade.
About the All India Management Association
The All India Management Association (AIMA), a non-profit organization, is the peak body for management in India. Located in New Delhi, it boasts over 37,000 individual and close to 6,000 corporate/institutional members across 68 affiliated local management associations. AIMA’s commendable work involves liaison between industry, government, academia, and students to further the cause of the Indian management profession.
Key Findings
The report suggests that digital trade will generate an economic opportunity with a potential worth of Rs. 3,331 thousand crore for India by 2030. This form of trade encapsulates digitally-enabled transactions involving goods and services, which may either be digitally or physically delivered. Examples include buying a book online or accessing data on the internet. Furthermore, digital trade is predicted to increase value addition to India’s domestic sectors by more than 14-fold by 2030.
It was found that, as of 2018-19, the export value of virtual goods and services enabled by the digital economy was $58 billion. This made it India’s second-largest export sector. The report estimates that this figure could see a surge of 238% to reach a whopping $197 billion by 2030.
Potential Challenges
While digital trade promises grand prospects for India, certain hurdles could hinder its growth. For instance, India is mulling over umbrella legislation on data protection, which could pose a challenge to digital trade liberalization. Furthermore, the country’s refusal to join any global deal on e-commerce, such as the Osaka Track, might also impact the scope of the sector. The lack of resources among smaller businesses to exploit international sales opportunities and build robust global networks could prevent the fuller adoption of digital trade practices.
Steps to Maximize the Impact of Digital Trade
To fully harness the benefits of digital trade, issues related to excessive bureaucratic procedures, restricted cross-border data flows, imbalanced copyright, and liability regulations need to be addressed. Sound regulatory frameworks, which focus on privacy and cybersecurity, are essential. Measures such as minimizing border friction and creating an interoperable international privacy rules system are necessary to foster an environment conducive to digital trade. Additionally, promoting clear guidelines for processing and storing data will undoubtedly support the growth of digital exports.
| Fact | Value |
|---|---|
| Reported economic opportunity by 2030 | Rs. 3,331 thousand crore |
| Predicted value addition growth by 2030 | 14-fold increase |
| Digital export value in 2018-19 | $58 billion |
| Estimated digital export value by 2030 | $197 billion |
Way Forward
This report outlines the potential for India to not only stimulate digital trade within its borders but also lead globally in advocating for facilitative digital trade rules across bilateral and multilateral trade negotiations. With thoughtful planning and decisive actions, India is well-positioned to maximize the economic opportunities that digital trade presents.
