BACKGROUND
The India-UAE Comprehensive Economic Partnership Agreement (CEPA) is the first major agreement that India has signed in over a decade.[1] The CEPA is being hailed as a “new-age” Free Trade Agreement (FTA) which has incorporated new topics that have hitherto remained underdeveloped in India’s FTA experience.[2] These include more comprehensive chapters on government procurement, intellectual property rights, stricter rules of origin and the inclusion of a digital trade chapter, among others.[3]
This article provides a bird’s eye view of the digital trade chapter of the CEPA and endeavours to leave readers with some thoughts as to how such chapters can be fleshed out in future FTAs. More detailed analysis on the topic shall follow in the coming weeks.
DIGITAL TRADE CHAPTER
The CEPA is India’s first FTA to have a separate chapter on digital trade.[4] The chapter primarily focuses on introducing paperless trading, adopting measures for consumer protection, promoting cross-border flow of information, adopting a legal framework for protection of personal data of users of digital trade, provisions on digital invoicing and payment, authentication of E-signatures, cybersecurity etc.[5] The chapter will further focus on building cooperation and harmonizing regulatory standards.[6] Both India & UAE have agreed on maintenance of status quo with respect to the World Trade Organization’s “e-commerce moratorium” wherein the parties will not be imposing custom duties on electronic transmission between both the parties.[7] Notably, the chapter has been kept out of the purview of dispute settlement under the agreement, thereby confirming the aspirational nature of the chapter.[8]
THE CASE FOR DIGITAL TRADE
The digital trade Chapter of India-UAE CEPA in essence is a “best endeavors” chapter wherein notably data protection is still subject to domestic laws of the parties.[9] Considering that India still does not have a personal data protection law, it remains to be seen how the provisions of the chapter will be utilized in the absence of an appropriate legal framework.[10] The provision also does not set any international standards for the development of such legal framework. Additionally, while the CEPA aims at promoting cross-border flow of information,[11] it is unclear as to how such flow of information will interact with the data localization requirements, if any, imposed by either party.
The provisions on cybersecurity are non-committal with little clarity on the approach that both the parties will undertake to promote secure digital trade.[12]
Against such background India may look to more robust digital trade Chapters in other FTAs, such as the U.S. – Mexico – Canada Agreement (USMCA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), for guidance. The importance of this is underscored given India’s future plans to sign ambitious FTAs with the developed nations such as UK, Canada, US, EU etc.[13] Some of the unique features in the digital trade chapters of USMCA and CPTPP are non-discriminatory treatment of digital products[14] and prohibition on requiring the disclosure of source code of a software as a condition to conduct trade between both the parties.[15] Moreover, the chapter is subject to the dispute settlement provisions under the respective agreements.
Furthermore, the digital trade chapters in USMCA & CPTPP contain elaborate commitment specific provisions on cross-border flow of information,[16] which is mandatory in nature, location of computing facilities[17] and means of protection against unsolicited commercial electronic communications.[18] In this context it is essential to note that the aforementioned areas are being addressed in the digital trade chapter of India-UAE CEPA but only in an aspirational manner with no specific commitments and enforcement mechanism.
WAY FORWARD
The economic growth and opportunity that digital trade provides is well recognized and is something that is set to assume primary importance in the coming times.[19] While, the CEPA’s digital trade chapter sets a promising framework to foster an environment conducive to the growth of digital trade and promote consumer confidence, more robust provisions may be worth considering going forward as digital trade continues to gather pace in and around the world.
KEY TRADE REMEDIAL UPDATES
| Product | Subject countries | Investigation | Particulars | |
| DGTR (Directorate General of Trade Remedies) | ||||
| Paper Decor | China | Anti-dumping Duty (AD) | DGTR issues positive final findings | |
| USA (Department of Commerce/International Tarde Commission) | ||||
| Raw Honey | India | AD | Final determination of sales at less than fair value | |
| Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes | Mexico | AD Administrative Review | Final determination of sales at less than normal value | |
| Polyethylene Terephthalate Resin | Canada, China, India & Oman | Continuation of AD | Final determination of likelihood of continuation or recurrence of dumping | |
| Sodium Nitrite | Russia | Countervailing Duty (CVD) | Preliminary determination of existence of countervailable subsidies | |
| Steel Concrete Reinforcing Bar | Turkey | CVD Administrative Review | Final determination of existence of countervailable subsidies | |
| Welded Stainless Steel Pressure Pipe | India | Sunset Review (SSR) AD & CVD | Final determination of continuation or recurrence of material injury | |
WTO, FTAs
TRADE POLICY
India
USA
CUSTOMS
SANCTIONS AND EXPORT CONTROL
USA
UK
Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion or advice
[1] Worldview with Suhasini Haidar | India-UAE FTA: what does it mean for bilateral ties?, The Hindu, 19 February 2022, available at: https://www.thehindu.com/news/national/worldview-with-suhasini-haidar-india-uae-fta-what-does-it-mean-for-bilateral-ties/article65063798.ece
[2] Why is the India-UAE partnership deal a game changer for trade?, Money Control, 22 February 2022, available at: https://www.moneycontrol.com/news/trends/current-affairs-trends/explained-why-is-the-india-uae-cepa-deal-a-game-changer-for-trade-8141371.html
[3] Ministry of Commerce & Industry, Press Release, 20 February 2022, available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1799756
[4] Chapter 9 of India-UAE CEPA (CEPA), Chapter-9.pdf (commerce.gov.in)
[5] Id.
[6] FTA to come into effect by early May, Indian goods to get duty-free access to UAE in 5 years, The Financial Express, 20 February 2022, available at: https://www.financialexpress.com/economy/fta-to-come-into-effect-by-early-may-indian-goods-to-get-duty-free-access-to-uae-in-5-years/2439032/
[7] Article 9.5, Chapter 9 of CEPA, Chapter-9.pdf (commerce.gov.in)
[8] Article 9.3, Chapter 9 of CEPA, Chapter-9.pdf (commerce.gov.in)
[9] Article 9.10, Chapter 9 of CEPA, Chapter-9.pdf (commerce.gov.in)
[10] India-UK FTA talks should champion digital trade, Financial Express, 3 November 2021, available at: India-UK FTA talks should champion digital trade | The Financial Express
[11] Article 9.11, Chapter 9 of CEPA, Chapter-9.pdf (commerce.gov.in)
[12] Article 9.19 Chapter 9 of CEPA, Chapter-9.pdf (commerce.gov.in)
[13] India’s FTAs: What Hasn’t Worked? What’s The Change In Strategy?, Bloomberg Quint, 29 January 2022, available at: https://www.bloombergquint.com/law-and-policy/indias-ftas-what-hasnt-worked-whats-the-change-in-strategy
[14] Article 19.4, Chapter 19 of USMCA, FTA/USMCA/Text/19-Digital-Trade.pdf; see also Article 14.4, Chapter 14 of CPTPP, TPP-Final-Text-Electronic-Commerce.pdf
[15] Article 19.16, Chapter 19 of USMCA, FTA/USMCA/Text/19-Digital-Trade.pdf; see also Article 14.17, Chapter 14 of CPTPP, TPP-Final-Text-Electronic-Commerce.pdf
[16] Article 19.11, Chapter 19 of USMCA, FTA/USMCA/Text/19-Digital-Trade.pdf; see also Article 14.11, Chapter 14 of CPTPP, TPP-Final-Text-Electronic-Commerce.pdf
[17] Article 19.12, Chapter 19 of USMCA, FTA/USMCA/Text/19-Digital-Trade.pdf, see also Article 14.13, Chapter 14 of CPTPP, TPP-Final-Text-Electronic-Commerce.pdf
[18] Article 19.13, Chapter 19 of USMCA, FTA/USMCA/Text/19-Digital-Trade.pdf, see also Article 14.14, Chapter 14 of CPTPP, TPP-Final-Text-Electronic-Commerce.pdf
[19] India-UK FTA talks should champion digital trade, Financial Express, 3 November 2021, available at: India-UK FTA talks should champion digital trade | The Financial Express