UK‑India FTA introduces first-ever source code protection: Why it matters
What's the story
The recently signed UK-India Free Trade Agreement (FTA) has introduced a major development in the realm of intellectual property (IP) protection. The deal, signed by Prime Minister Narendra Modi and his British counterpart Keir Starmer on July 24, includes a commitment to prevent the forced transfer of source code and embedded algorithms. This is expected to provide significant IP protection for exporters of artificial intelligence (AI), software, and digital services from India.
Impact
Major boost for Indian tech exporters
The new provision is being hailed as a major boost for Indian tech, information technology (IT), and IT-enabled services (ITeS) exporters. It is especially beneficial for companies building AI models, enterprise software, and Software as a Service (SaaS) platforms that use proprietary code. Ashita Jain of ORF America called it "a notable policy shift" that could set a precedent in India's ongoing trade negotiations with other developed economies.
Change
Departure from India's previous stance on digital trade negotiations
The new provision, part of the digital trade chapter released by India's Ministry of Commerce, marks a departure from India's previous stance on digital trade negotiations. Earlier, India had avoided such clauses in trade discussions due to regulatory flexibility and domestic policy priorities. This change comes as top Indian IT firms are moving toward IP-led growth models amid rapid changes brought about by AI technology.
Cooperation
Framework for cooperation on emerging technologies
The FTA also outlines a structured approach to developing policy frameworks for the "trusted, safe, and responsible use" of emerging technologies such as AI, quantum computing, blockchain technology, and immersive tech. Under Article 12.17 (Cooperation on Emerging Technologies), it emphasizes cooperation on ethical use, algorithmic transparency standards, and mitigation of unintended biases. This is especially relevant in the context of global AI regulation efforts.
Benefits
Deal adds extra layer of trust around IP protection
The new trade agreement is likely to benefit not just big IT services firms but also India's growing base of AI start-ups. It will also benefit around 1,700 Global Capability Centers (GCCs) that develop and deploy machine learning systems for global markets. For UK buyers of Indian tech services, this deal adds an extra layer of trust around IP protection and software reliability.