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U.S. senators urge India to soften data localisation stance

Reuters  |  NEW DELHI 

By Aditya Kalra

(Reuters) - Two U.S. senators have called on to soften India's stance on data localisation, warning that measures requiring it represent "key trade barriers" between the two nations.

In a letter to Modi dated Friday and seen by Reuters, U.S. Senators and - co-chairs of the Senate's caucus that comprises over 30 senators - urged to instead adopt a "light touch" regulatory framework that would allow data to flow freely across borders.

The letter comes as relations between and are strained over multiple issues, including an Indo-Russian defence contract, India's new tariffs on and other items, and its moves to buy from despite upcoming U.S. sanctions.

Global payments companies including Mastercard, and have been lobbying India's and the Reserve of to relax proposed rules that require all payment data on domestic transactions in India be stored inside the country by October 15.

The letter is most likely a last-ditch effort after the told officials at top payment firms this week that the central would implement, in full, its data localisation directive without extending the deadline, or allowing data to be stored both offshore as well as locally - a practice known as data mirroring.

"We see this (data localisation) as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership," the U.S. senators said in the letter that has not been previously reported.

Modi's office did not immediately respond to an email seeking comment.


Other than the proposal, India is working on an overarching that calls for storing all critical personal data in India. and are also being developed.

The letter also raised concerns on the draft data protection bill and policy framework that called for stringent localisation measures.

These measures have unnerved some tech companies who fear it will increase their infrastructure costs, hit their global fraud detection analytic platforms and affect planned investments in India at a time when more and more Indians are going online and using digital payments.

U.S. lobby groups, that represent companies such as Facebook Inc, and Inc-owned Google, have also voiced concerns about the proposals.

Shamika Ravi, a member of Modi's economic advisory council, had earlier told that the moves were in the "long-term strategic and economic interest" of the country.

The senators added that any concerns related to "protection and security" as well as access to data for lawful purposes were possible without restrictions on physical location, according to the letter.

Government sources have previously told though, that stringent data localisation measures were essential for gaining easier access to data during investigations.

The measures in India come at a time when countries around the world are announcing stringent rules to regulate how firms store data and protect privacy, in the aftermath of Facebook's Cambridge Analytica scandal.

(Writing by Suvashree Choudhury; Editing by Euan Rocha, and Andrew Bolton)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, October 13 2018. 17:20 IST