All about the data localization policy of India



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Several laws and regulators converge on the hot topic of data localization. The deadline for a mandate from the Reserve Bank of India for financial technology companies to reserve data only in India expired last week. Other standards relating to the retention of accounting data going back to 2014 locally, the e-commerce bill that requires companies to locally store "community data collected by devices from the Internet of Things in the world". "public space" and "user-generated data in India from various sources, including e-commerce. platforms, social media, search engines, etc. "

The Issues
Connected Internet users generate a huge data explosion in India. According to a report from real estate and infrastructure consulting firm Cushman and Wakefield, the size of the digital population in India represents a huge potential demand for data center infrastructure.

Digital data in India rose to about 40,000 petabytes in 2010; it is expected to reach 2.3 million petabytes by 2020, twice as fast as the global rate. If India hosts all this data, it will become the second largest investor in the data center market and the fifth largest market in the data center market by 2050, the consulting firm said.

Business Reactions
Large technology firms are dissatisfied with such restrictive laws. Keith Enright, Google's privacy officer, said in a recent article, "Mechanisms for cross-border data flows are essential for the modern economy. Countries should adopt an integrated privacy regulatory framework, avoiding as far as possible overlapping or inconsistent rules. "

Indian companies, and more specifically startups, are dedicated to it
Their goal is to protect data and protect Indian companies. Companies such as Paytm and Phonepe have strongly supported the location of the data, a blog post of the latter stating that this initiative "would allow better regulatory oversight and would fill the gaps that some foreign companies have long exploited to escape payment of Fair taxes in India. "

Problems Remain

Companies want to store, process, and badyze data from multiple geographic regions. Some companies and some lawyers argue that restricting the free flow of data can be counterproductive. "Excluding all Indian payment data from transfers is a cumbersome, expensive task that can limit the features currently available," says Arun Prabhu, partner, Cyril Amarchand Mangaldas.

A Trade Problem

As the debate on data localization began in India, pressures from multinational technology companies caused the problem to snowball and become free trade. Dennis Shea, US ambbadador to the WTO, has called for a ban on data localization, even as US Senators John Cornyn and Mark Warner have called on India to soften its stance on the subject, according to a report from the Reuters agency.

Is the location important?
Technology experts, such as Prashant Pradhan, IBM Vice President and Chief Technology Officer (Asia Pacific), argue that the physical location of the data is irrelevant. Your data is easily accessible from a server in Bengaluru or Boston. In fact, having a mirror of your data in India can actually increase operating costs and compliance. The most important is quality rather than quantity. While terms such as Big Data were fashionable before, perhaps more important to businesses is the quality of the data they can secure and store. "Although the amount of data itself has increased, it's unclear who has access to this data and what they can do with it," he says.

Regulations worldwide
The European Union's General Data Protection Regulation does not contain a specific rule on the regulation of data, pointing out only that cross-border data transfer can take place if the other country applies strict rules for securing the information. . Several other countries have implemented different forms of data localization.

Nigeria, for example, has required that all subscriber and consumer data from telecommunication and telecommunication companies and government data be located since 2013. Germany requires telecommunication and the internet store the data locally, while the rules of Russia impose the citizen data be stored inside its borders.

However, the most comprehensive laws are found by far in China, where the regulation covers not only personal information, but also what is called an "essential information infrastructure" encompbading all aspects of life daily. Legal experts have also said that broad terminology paves the way for open government access to such data and the establishment of a strong cyber sovereignty.

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