Digital Trade and Services Exports

Digital Trade and services have not, so far, featured seriously in the India-US Bilateral Trade Agreement (BTA) negotiations thus far because of its focus on “goods” not services.

India’s total services exports accounted for $387.5 Billion in 2024-25. The US has been pushing for greater access to Indian data since Trump 1.0, challenging India’s strict data localisation norms which require Indian data to be stored within the country. This was a major source of friction between India and the US during that period and, in anticipation of US pressure and retaliation during Trump 2.0, the Indian government eliminated its so called 6% “Google Tax” on payments exceeding Rs 1 lakh (approximately USD 1160) per annum to a non-resident service provider for online advertisement, effective April 2025. This refers to the equalization levy on online digital ads in force since 2016. This cancellation was part of India’s amendments to the Finance Bill 2025. 

Canada recently removed all its domestic digital taxes on Google, Meta and other Big Tech companies recently even though Prime Minister Carney says that he was going to do that anyway and it was not because of President Trump and US pressure even though the timing of its withdrawal coincided with Trump’s public threats to Canada on this.

You may read evaluation note from here.

This note was published in Cross Section Conversations on September 10, 2025.