Mandatory data localisation could hurt India’s GDP growth: Broadband India Forum

Should the final Data Protection Bill relax data localisation requirements to sustain our record GDP growth? Does data localisation even solve the original intent of the bill – to protect our data? Is the current draft bill lopsided in prescribing penalties for corporations but without checks and balances regarding government surveillance? Will India’s increasingly internet-savvy public be burdened with higher costs due to localisation of vast amounts of data?

These were the main topics of discussion at the Broadband India Forum (BIF) panel discussion on the recently released draft Bill on Data Protection. Broadband India Forum (BIF) is a policy forum and think-tank that includes membership of startups, professional entities, Telcos and global technology players. Mr. TV Ramachandran, President Broadband India Forum stated, “this meeting was to get a wide range of inputs from stakeholders to finalize the BIF response to be sent shortly.”

BIF and the panel of experts at the meeting welcomed the opportunity for public consultation extended by the Ministry of Electronics and Information Technology (MeiTY) before drafting the final bill. The panel felt that having to store vast amounts of data within the country, whether exclusively or as a copy, would have an adverse socio-economic impact on innovation, information and technology access, and trade. Dr. Kuldip Singh, former member TDSAT, talked about India presently also lacking the infrastructure and capacity needed to set up and maintain large data centres. He mentioned that incentivizing innovation instead of forced data localization will prevent demand-supply issues, and increase in prices of ICT services.

With an unwavering goal to enhance broadband and internet access for all Indians, in line with the PM’s Digital India mission, TK Arun, Sr. Editor Economic Times stated, “Protecting Indians’ personal data is critical for national safety but is demanding data be physically located in India the answer?”

The panel noted that even the current gold standard of global privacy regulations, the EU’s GDPR (General Data Protection Regulation) does not mandate localisation but ensures that the long arm of their law extends to any data related to their citizens – regardless of the location of said data. Nikhil Pahwa, Founder & CEO – MediaNAMA remarked that other democracies around the world are also addressing concerns around lawful access to data located in a cloud without resorting to data localisation. Empowering India’s law enforcement authorities beyond our borders through bilateral agreements with other nations will help penalize wrongdoers, protect our data anywhere in the world and promote economic growth.

Several members of the panel believed localisation could place a huge financial and operational burden on India’s start-up and small business ecosystem. Indian innovation thrives and competes on par with global giants through the use of economical cloud-based services. Will localisation hamper India’s plan to bring jobs and investments to India, particularly in the exports and IT-BPM services industries? And how will it affect our trade agreements with the US and other nations? Dr. Kuldip Singh remarked about a reduction in cross-border data flows with a protectionist policy potentially prompting retaliatory measures from other nations that might further hamper the growth of our economy.

When asked how he sees localisation affecting small businesses and startups, Mr. TK Arun expressed concern about the general Indian public bearing the burden of any additional operational and legal costs incurred. While the very rich may not feel the pinch, what is the effect likely to be on our middle and lower stratas?

Speaking about the issue of data privacy, Mr. TK Arun, stated, “today there is no law that prevents the government from infringing on your property by the state. Government agencies must also be held accountable to the people.” Data-driven innovation and data privacy could peacefully co-exist provided citizen privacy is protected from unwarranted government surveillance as well.

Mr. Nikhil Pahwa, Founder MediaNAMA stated, “Currently the costs for anyone to create anything in this country is very low and this promotes innovation. Localisation requirements will make it cost-prohibitive for startups and also undermine their capability to access global markets through digital platforms.”

Ms. Swati Punia, CUTS spoke from the consumer point of view. She felt that the draft bill was tilted towards establishing data sovereignty or government restrictions versus consumer sovereignty where users control the data. She mentioned that data localization will compromise consumer’s ability to access information and state-of-the-art technologies from across the world.

The panel meeting was well-attended with over fifty representatives from the media, high-profile authors, policy experts, and industry and consumer rights groups.

The meeting concluded with a debate on the role of the Data Protection Authority – how will their role be defined going forward? The panel recommended that the final bill includes checks and balances for when the government can access an individual’s data, and provide options for recourse for affected individuals.