India uses trade deals to remove fintech export hurdles

India is actively using its free trade agreements to remove regulatory barriers for fintech exports, encompassing critical areas such as data flows, cloud computing, and cybersecurity. Commerce Secretary Rajesh Agrawal stated at the Global Fintech Fest that these agreements are a key tool in facilitating the international expansion of India's digital financial services.

Agrawal highlighted that trade negotiations are now extending to include payment regulations, data flow rules, and cloud policies. "A digital payment device will simultaneously involve financial regulation, telecommunication, infrastructure around telecommunication, cloud computing, data flows, cyber security, AI investments, movement of professionals," he explained. This broader scope aims to address the complex, multi-domain nature of modern digital finance.

While the global trade in financial services exceeds $670 billion, India's current share is approximately 1.2% to 1.3%. Agrawal noted that nearly all of India's fintech exports are delivered digitally, without physical movement, presenting a significant opportunity for growth. Financial services are seen as a key area for diversification within India's overall export strategy.

Additionally, India is focusing on reducing the cost of cross-border remittances. With over $125 billion received annually, the current 5-6% average cost is a substantial burden. Halving this to 3% would leave an additional $5 billion for Indian migrant workers, Agrawal indicated.

As a practical example, Agrawal cited an order-based lending program on the Government e-Marketplace, where fintech firms lend to small suppliers against orders. He concluded by emphasizing that trust, built on robust cybersecurity, data protection, and AI explainability, is becoming a prerequisite for global competitiveness in the fintech sector.