India-EU Trade Pact to Reassess Cross-Border Data Sharing Arrangement in Five Years

India-EU Free Trade Agreement Lacks Binding Commitment on Cross-Border Data Flows

The recently released text of the India-EU Free Trade Agreement (FTA) highlights a significant omission: a binding commitment on free cross-border data flows. While the agreement does include provisions to revisit this issue in five years, it currently does not guarantee unrestricted data transfer between the two parties.

Key Provisions

The digital trade chapter of the agreement states that the parties will reassess the need for additional provisions, including free cross-border data flows, within five years of the deal's entry into force. This provision is significant as it does not include a binding commitment on free data flows, which typically allows companies to transfer data across borders without being required to store or process it locally.

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Data Localisation and Digital Trade

The agreement also includes provisions to facilitate digital trade, such as legally recognised electronic contracts and digital signatures. Both sides commit to promoting paperless trade and preventing governments from requiring access to a company's source code as a condition for market access, subject to exceptions for law enforcement, cybersecurity, and other public policy purposes.

Exceptions and Priorities

However, the agreement includes exceptions for certain digital trade commitments, including audio-visual services, which typically cover streaming platforms, broadcasting, and related content services. Additionally, the agreement prioritises privacy, allowing each side to adopt safeguards it considers appropriate to protect personal data, including rules governing cross-border transfers.

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Key Dates

• February 27: The text of the India-EU FTA was released.
• January 27, 2026: The India-EU agreement was signed after nearly two decades of negotiations.

Impact

The omission of a binding commitment on free cross-border data flows may impact the ease of doing business between India and the EU, particularly for companies that rely on data transfer across borders. However, the agreement's provisions to facilitate digital trade and promote paperless trade are expected to have a positive impact on trade between the two parties.