Ex-RBI Governor emphasizes safeguarding digital sovereignty and MSME interests in upcoming trade negotiations.
Article Body (Economy India): Former Reserve Bank of India (RBI) Governor Dr. Raghuram Rajan has advised the Indian government to exercise caution and strategic foresight in its upcoming trade negotiations with the United States. His remarks come amid growing discussions around digital trade, market access, and geopolitical economic alignments.
Speaking at a recent policy forum, Dr. Rajan stressed that while engaging in trade talks with developed economies like the US is important, India must not compromise on long-term national interests, especially in sensitive sectors such as data sovereignty, digital services, and MSMEs.
“We must not rush into trade deals that undermine our future capacity to develop homegrown digital ecosystems or protect our smaller enterprises,” Rajan noted.
He pointed out that many large trade agreements proposed by developed nations often come with hidden costs, such as restrictions on domestic data storage, pressure to open up government procurement, and leniency in environmental or labor standards—all of which can hurt India’s domestic priorities.
Dr. Rajan also urged the government to maintain transparency and stakeholder consultation throughout the trade negotiation process. He emphasized that small manufacturers, tech startups, and rural enterprises should not be left behind in the push for globalization.
India is currently in early-stage trade discussions with the US, with a focus on tech, pharma, agriculture, and digital commerce. The US is seeking more market access in areas where India has traditionally been protective, including e-commerce regulations and data localization norms.
In conclusion, Rajan warned that while trade engagement is critical, India’s negotiators must be alert to potential pitfalls and leverage the country’s growing economic strength to strike balanced, forward-looking agreements.
(Economy India)
