Data Localistation

Important excerpts from The Hindu:

  • In a digital economy, data is the central resource. Data is so important that it has been compared to oil, water, property etc.  How data will be employed fruitfully, and its value captured, will decide a nation’s rank in the emerging new global geo-economic and geo-political hierarchies. A new concept of ‘data colonisation’ has been introduced which means that countries would have to completely depend upon countries like China and USA for data and its analysis. Data is the basis of detailed and deep intelligence about a community.
  • Seven of the top eight companies by market cap globally today are data-based corporations. A decade back, this list was dominated by industrial and oil giants. Almost all top digital corporations in the world are U.S. or Chinese.
  • If India agrees to the provisions of Chapter 10 on e-commerce of RCEP, as specified by most of the other countries, it will mean it won’t be allowed to impose data localisation rules on companies looking to do business in India. India cannot be prevented from asking financial companies to maintain a copy of their data within India, but it is unclear still whether India can mandate that such data must only reside within the country.
  • This would go against the Reserve Bank of India’s (RBI’s) norms on localisation of payments data that it had ordered in April 2018.
  • RCEP norms require that no data localisation conditions should be put on companies and no cross-border transmission of data shall be prevented.
  • In its April 2018 notification, the RBI had said that “all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India.” This data is to include the full end-to-end transaction details, information collected, carried, or processed as part of the message or payment instruction.
  • Need for more data sharing within the country.
  • Better access to data for domestic business.
  • Appropriate data policies must ensure that the required data is actually available to Indian digital businesses. Data belongs to the people and must be used for their welfare. Law must mandate sharing of data for welfare purposes.
  • Community data as mentioned in the draft e-commerce policy must be given effect to.
  • The very complex data policy issues include data classification, data ownership rights, data sharing, data trusts etc.
  • A complex and gradual process of classification of various kinds of data, and developing governance frameworks around them, is required.
  • Community data requires close regulation. This could be about accessing such data for social purposes, ensuring that important public interest is met in various uses of data, and to make data available to domestic businesses, to stimulate competition and for India’s digital industrialisation.
  • Italy approved a new tax on digital companies, including U.S. tech giants, as part of its 2020 draft budget, a move that could draw threats of retaliation from Washington. The levy will oblige firms such as Facebook, Google and Amazon , to pay a 3% levy on Internet transactions, according to the text of the draft budget.