European Commission flags concerns over India's data localisation norms, trade barriers

Flagging issues like data localisation "restrictions" and elevated import duties, the European Commission Wednesday said it will work towards comprehensive and balanced agreements with India to boost economic ties.

In April this year, the RBI had given six months' time to global payment companies to store transaction data of Indian customers within India.

Data localisation requires data about residents be collected, processed, and stored inside the country, often before being transferred internationally, and usually transferred only after meeting local privacy or data protection laws.

Enhancing market access for European Union (EU) companies, particularly for SMEs, will require removing existing obstacles and preventing the emergence of new tariff or non-tariff barriers, said the joint communication adopted by the EC and the high representative of the Union for Foreign Affairs and Security Policy in Brussels.

The document sets out the EU's vision for a strategy to strengthen cooperation and the partnership with India.

"Technical barriers to trade, sanitary and phyto-sanitary measures, elevated custom duties, mandatory testing and local certification requirements, data localisation restrictions, deviation from international standards and agreements, as well as discrimination based on legislative or administrative measures by India affect a wide range of sectors, including goods, services, investment and public procurement," it said.

In this respect, the communication said the EU remains firmly committed to working towards comprehensive and balanced agreements with India with sufficient level of ambition to respond to each side's key interests in trade and investment and which contribute to sustainable growth and development in both the EU and India.

In particular, the EU will continue to engage with India to ensure that such an agreement will be economically meaningful, delivering real new market openings in all sectors to both sides, and contain a solid rules-based component, it added.

The proposals made in the joint communication will now be discussed in the European Parliament and the Council.

The document further said the EU recognises privacy as a fundamental right and India is also moving in this direction.

The adoption of a comprehensive data protection law by India would not only serve India's people, but also significantly facilitate bilateral data flows, including by providing the basis for a possible adequacy finding by the European Commission.

This would benefit investment, trade and security cooperation, it added.

The Joint Communication replaces the last Commission Communication on India of 2004, recognising that India has emerged as the fastest-growing large economy and has acquired an important geopolitical role.

According to an official release, the Communication aims to strengthen the EU-India Strategic Partnership by focusing on sustainable modernisation and on common responses to global and regional issues.

It also seeks to reinforce the effectiveness of the EU's external action and is coherent with the implementation of the Global Strategy.

India is a key player in the interconnected world, said High Representative/Vice-President Federica Mogherini.