Parliamentary panel asks govt to formulate dedicated framework to protect digital economy, services sector export

India should formulate a dedicated framework for the digital economy and services sector, focusing on harmonizing cross-border data flows and protecting intellectual property (IP) rights to secure the growth of Indian Global Capability Centres (GCCs) and IT-enabled services in the United States market, the department related Parliamentary Standing Committee on Commerce has recommended.

The committee, in its ‘Evaluation of India-US Trade Relations’ report released on August 6 wanted the Ministry of Commerce to sustain the trend of India’s trade surplus with the US. The Committee wanted the government to closely monitor developments affecting India's Trade and Commerce, including tariff measures and non-tariff barriers in the United States and provide timely policy support to sectors that face adverse impact due to tariff measures so that India's export growth is not impacted. The Committee asked the government to design a targeted strategy to boost high-value knowledge exports such as artificial intelligence, digital health and engineering research to maintain India's long-term competitive edge in services.

India’s services exports to the US stood at $ 51.20 billion, growing at a CAGR of 11.58 % since 2020. At the same time, India’s services imports from the US reached $ 47.32 billion, with a CAGR of 18.68%. In last one decade, the total trade in services with the U.S. has more than doubled, growing from $ 40.53 billion in 2014 to $ 98.52 billion in 2024. India's services imports from the U.S. are growing at a much faster rate (18.68% CAGR) than India’s services exports (11.58% CAGR).

The major Indian services exports to the US are IT services (software development, application maintenance, cloud services, cyber security, AI solutions, data analytics and IT consulting), business process management services (customer support, back-office operations, accounting, payroll processing and knowledge process outsourcing ), professional and consulting services (legal, engineering, architectural, management consulting and technical services), financial services (fintech services, financial analytics, risk management, auditing and accounting services ), R&D services (pharmaceutical research, engineering design, product development and innovation services), telecommunications and digital services (telecom support, digital platforms, e-commerce support and data processing services), healthcare services (telemedicine, medical transcription, clinical research and healthcare IT services ) and educational services (online education, training, certification and academic collaboration services).

The major services India imports from the US are technology and software services (enterprise software, cloud computing, digital platforms and technology licensing ), financial services (banking, investment advisory, insurance and capital market services), intellectual property services (royalty, licensing fees, patents, trademarks and technology transfer), professional services (legal, management consulting, accounting and technical advisory services ), R&D services (advanced R&D, scientific collaboration and innovation support ), transport and logistics services (air transport, shipping, logistics and supply chain management services), audio-visual and entertainment (film, media, streaming and digital content services) and education services (higher education, professional training and academic programmes).