Hinrich Foundation and All India Management Association (AIMA) launch new Digital Trade Report: Digital trade could create a ₹3,331 thousand crore economic opportunity for India by 2030
- Digital trade can have a huge positive impact on India’s domestic economy, with some of the biggest beneficiaries coming non-digital sector, in particular, from financial services, agriculture and food, infrastructure and consumer and retail.
- The value-added to India’s domestic sectors could grow more than 14-fold by 2030.
- The value of digital exports, today India’s 2nd largest export sector, could also grow 238 percent by 2030.
- A conducive policy and regulatory environment for digital trade and cross-border data flows is essential for realizing this projected growth.
- In particular: enabling open data flows (e.g. creating an internationally interoperable privacy rules system), minimizing border frictions (e.g. imposition of custom duties on digital goods), and building flexibility into copyright and intermediary liability regulations will be critical elements for fully achieving the digital opportunity.
The Hinrich Foundation, the All India Management Association (AIMA) and AlphaBeta Advisors released a report (“The Data Opportunity: The Promise of Digital Trade for India”) measuring the current value-added of digital trade to the Indian economy, and its potential future contribution for growth. The report also includes policy suggestions for capturing the digital trade opportunity. Download the report here.
Key highlights are presented below:
Digital trade is already adding significant value to India’s domestic economy and this value-added could sizably increase with the right settings
Digital trade offers significant domestic and export growth opportunities for Indian companies, including in non-digital sectors. However, important policy and regulatory discussions on data protection, storage, and transfer are now required to further expand the digital opportunity. With the right settings, the value-added of digital trade can grow more than 14-fold and reach ₹3,331 thousand crore (US$512 billion) by 2030. – Berenice Voets, Director of Public Affairs and Policy, Hinrich Foundation
According to the report, digital trade can enable Indian firms to reduce the cost of storing data, improve business practices, generate richer business insights, and enter new markets. Digital trade can also facilitate the more efficient management of global supply chains (e.g. tracking of export containers using Internet of Things technology).
“Rapid technological developments are facilitating rapid rise of international cross-border trade. Domestic economies are also reaping in benefits as government and policymakers take into account the importance of digital trade while formulating trade and economic policy.” – Mr. Harshvardhan Neotia, President, All India Management Association & Chairman, Ambuja Neotia Group
“Digital trade has already created a huge positive, but this benefit can grow even more rapidly in the right setting in the Indian landscape, involving the government, business powerhouses and society at large.” – Ms. Rekha Sethi, Director General, All India Management Association
Digital exports represent the second largest export sector of India today with significant potential for growth
Enabling cross border data flows and clarifying the framework for processing and storing data will be required to further expand the contribution of digital exports.
“The export value of digital goods and services is worth ₹379 thousand, making it India’s second largest export sector today. In the absence of barriers to digital trade, it is estimated that the value of digital exports could grow 238 percent to reach ₹12.81 lakh crore (US$197 billion). In particular, open digital trade could further enable Indian SMEs to foray into global markets.” – Ms. Kathryn Dioth, Chief Executive Officer, Hinrich Foundation
There is an opportunity for India to play a leading role in international policy formulation for digital trade rules
Policymakers in India and across the Asia Pacific are developing regulations for the digital economy. Given India’s prominent position in the global and regional economy, there is the opportunity for India to play a leading role, not only at home, but also abroad when negotiating bilateral and multilateral trade agreements, in driving the development of digital trade rules that will enable the country to capture the digital dividend.
For more information about the Hinrich Foundation’s digital trade research and to download existing reports, visit https://hinrichfoundation.com/trade-research/digital-trade-research/.
All information in this report is derived from AlphaBeta analysis using both proprietary research and publicly available data. Detailed information on the methodology can be found on Hinrich Foundation website: https://hinrichfoundation.com/trade-research/digital-trade-research/
About the authors
This report was prepared by the Hinrich Foundation and the All India Management Association (AIMA) with analytical support from AlphaBeta. The Hinrich Foundation considers digital trade to be a growth opportunity for countries. This report aims to help policymakers, businesses, and other stakeholders to better identify ways to harness the benefits of digital trade and to manage potential risks. This report is one of the eight digital trade reports the Hinrich Foundation and AlphaBeta will be publishing. Other economies include: Australia, China, Indonesia, Japan, Malaysia, the Philippines and Vietnam.
Background of the authors
Hinrich Foundation is a non-profit organization focused on promoting sustainable global trade. The Foundation’s work is grounded in the belief that sustainable global trade requires mutually acceptable terms and balanced economic, social and environmental outcomes. It produces forward-looking policy research, as well as programs that educate and engage stakeholders on global trade issues. The aim of the Foundation is to influence and improve trade behaviors and outcomes, so that trade continues to create maximum benefits for all its participants, for geopolitical stability.
All India Management Association (AIMA)
The All India Management Association (AIMA) has always been at the forefront of building management capability in the country. AIMA actively contributes to the management profession through its various programmes, training, education and testing services. Since its inception, it has continuously strived to search for new avenues for management learning and development, and to enhance the capability of aspiring and practicing management professionals.
AlphaBeta (www.alphabeta.com) is a strategy and economic advisory business serving clients across Australia and Asia from offices in Singapore, Sydney, Melbourne and Canberra.