10% rise in cross-border data flows drives India's total goods trade volume by $6.97 bn: Report

A 10 per cent growth in cross-border data flows measured in terms of global Internet bandwidth helps India clock a USD 6.971 billion rise in total volume of goods trade for India, according to a report by Internet industry body IAMAI and think-tank ICRIER.

The Internet and Mobile Association of India (IAMAI) - whose members include the likes of Google, Facebook, Flipkart, Paytm and others - said the report found that the impact of data localisation is not uniform across sectors and also varies between companies within the same sector.

"...a 10 per cent increase in cross-border data flows (measured using international internet bandwidth) leads to an increase of USD 6.97 billion in total volume of goods trade for India," the report said.

From 2016-17 to 2017-18, total international Internet bandwidth in India increased by 35 per cent, leading to an estimated increase of approximately USD 24 billion in India's goods trade, it added.

"Should the projected rate of growth for international Internet bandwidth be at the existing CAGR (62.7 per cent), cet par, India's total volume of goods trade is likely to increase by an estimated USD 43 billion annually, on account of increased cross border data flows," it pointed out.

The analysis found that all Internet-based businesses may not be impacted by data localisation.

"Additionally, all domestic companies do not necessarily stand to gain from localisation. Domestic companies have also reported negative cost implications of data localisation," it added.

The report suggested that policy should encourage bilateral and plurilateral data transfer arrangements and soften localisation measures through mirroring of critical data sets.

Additionally, there must be a focus on minimising policy overlap, institutionalising consultative and transparent policy making, etc, it added.

IAMAI Vice President Bhanupreet Singh said the discussion so far has been focused on national security and allied issues.

However, assessment from an economic perspective would add another dimension to the discourse, he added.

"The era of burgeoning data volumes driving economies across the world demands an inclusive, transparent and comprehensive policy discourse," ICRIER Director and CE Rajat Kathuria said.