In a significant move for Indian trade policy, the recently finalised UK-India Free Trade Agreement (FTA) includes a pledge to limit the compulsory transfer of source code and embedded algorithms, ensuring intellectual property (IP) protection for exporters involved in AI, software, and digital services.
According to the agreement, both countries recognised the benefits of digital trade and the need to improve digital trading systems. They emphasised cooperation in domestic regulations and the importance of international collaboration for inclusive regulations.
This is an advantage for Indian tech, IT, and ITeS exporters, especially for companies focused on developing AI models, enterprise software, and SaaS platforms that depend on proprietary code.
Additionally, the countries committed to adopting policies that ensure technological neutrality, address challenges posed by emerging technologies such as AI, and support consumers and businesses in digital trade, thereby enhancing consumer confidence.
With the rapid transformation in business models driven by AI, it is expected that the traditional pyramid structure will diminish. Consequently, leading IT companies in India are shifting their focus towards growth through intellectual property (IP).
Infosys, one of the country’s largest IT firms, highlighted the significance of IP-driven initiatives within the financial sector. “Some of our programs, for example, what we’re doing in our insurance platform, what we’re doing in our financial services, banking platform in physical, those are areas where we see more and more IP,” CEO Salil Parekh said while addressing a press conference on July 23, as per reports.
The move is expected to benefit large IT firms, Indian AI startups, and approximately 1,700 Global Capability Centres (GCCs) that develop machine learning systems for global markets.
For UK buyers of Indian tech services, the agreement enhances trust in IP protection and software reliability.
India’s commitment to the FTA aligns it with global digital trade standards, following countries such as Japan, the UK, and the US, which seek equal access to digital markets and improved protections for source code.
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