Two American Senators have urged Prime Minister Narendra Modi to soften India’s stance on data localisation, warning that such measures represent “key trade barriers” between the two countries, Reuters reported on Sunday.
In April, a Reserve Bank of India circular asked all payment system operators in India to ensure that their data is stored within the country. Asian countries such as China, Japan and Malaysia follow the same rule. The central bank had given companies time till October 15 (Monday) to comply with the mandate. Earlier this week, messaging service WhatsApp said it has built a system in India to store payment-related data locally in the country.
In a letter to Modi dated Friday, Senators John Cornyn and Mark Warner, who are co-chairs of the Senate’s India caucus that comprises over 30 senators, urged India to instead adopt a “light touch” regulatory framework that would allow data to flow freely across borders.
“Data localisation requirements, such as those contained in the draft data protection bill and draft national e-commerce policy framework, will have negative impacts on the ability of companies to do business in India, may undermine your own economic goals, and will likely not improve the security of Indian citizens’ data,” they said in the letter, according to PTI.
The two Senators said the forced data localisation will be counterproductive when it comes to India modernising its framework regarding law enforcement requests for data.
The letter comes at a time when relations between Washington and New Delhi are said to be strained over matters such as the Indo-Russian defence contract, India’s tariffs on electronics and other items, and the country’s move to buy oil from Iran despite US threatening sanctions.
“Both the protection and security of data as well as access to data for lawful purposes can be enabled without a requirement that data be stored in a specific physical location,” the letter said. “We encourage increased dialogue on these issues between law enforcement agencies in the US and India.”
On Friday, Deputy Trade Representative and US Ambassador to the World Trade Organization Dennis Shea said the US wants to prohibit data localisation to ensure free flow of information and data across borders.
Meanwhile, the Reserve Bank of India will not relax the October 15 deadline data localisation, PTI reported, quoting unidentified officials. Global financial technology companies had reportedly sought an extension of the deadline.