Data Sovereignty and Digital Trade, India’s Regulatory Dilemma Evangelin Patil

Data Sovereignty and Digital Trade: India’s Regulatory Dilemma

Abstract :

The rapid expansion of cross-border digital data flows has revealed clear limitations in the current international legal framework. Balancing state data sovereignty with commitments to international trade laws has become increasingly challenged. The fundamental problem is that the current international legal frameworks are not updated in order to cover today’s data driven economies, resulting in inconsistent approaches to cross-border data governance. India’s Digital Personal Data Protection Act, 2023 is a hybrid approach to cross-border data transfer as it does not strictly mandate all data to stay in India but still keeps control through restrictions. It further emphasizes State-controlled data governance, thereby, reflecting a sovereignty oriented model. The World Trade Organization promotes free- flow of data as an essential component of digital trade. It discourages data localization as it believes that it acts as a barrier for international trade. Despite growing scholarship on cross border data governance, there is a lack of doctrinal analysis which compares India’s emerging data governance measures with its specific WTO obligations. This paper fills that gap by testing Indian data localization and data-flow rules against WTO provisions and exceptions, thereby elucidating the conditions under which these rules are compatible with, or likely to conflict with International trade obligations. This study uses a doctrinal method of legal analysis and comparative approach, to analyze the relationship between India’s data protection framework and international trade obligations. It further demonstrates that India’s data governance framework does not fully violate WTO rules but adheres to them to a certain extent, with compatibility largely dependent on the application of trade law exceptions.

Key words:

Data sovereignty, digital trade governance, cross-border data flows, WTO compliance