The US wants to prohibit data localisation to ensure there is a free flow of information across borders, a senior Trump administration official has said, amid reports that major American IT companies are up in arms against the latest Indian directive which kicks off next week.
Data localisation is an act of storing data on any device that is physically present within the borders of a particular country where the data was generated.
The RBI, in a circular in April, said all system providers will have to ensure that the entire data relating to payment systems operated by them are stored in a system only in India. It gave time till October 15 to comply with the mandate.
“We want to have prohibitions on data localisation to ensure that there’s free flow of information, free flow of data across borders, requiring companies to give up their source code, permanent ban on taxation or duties on digital transmissions,” Dennis Shea, deputy US trade representative and US ambassador to the WTO, told a Washington audience on Friday.
“And by the way, South Africa and India want to rethink the current moratorium on those duties,” Shea said in response to a question at the Center for Strategic and International Studies (CSIS), a top American think-tank.
Two US senators have also called on Prime Minister Narendra Modi to soften India’s stance on data localisation, warning that the measures requiring it represent “key trade barriers” between the two nations.
In a letter to Modi on Friday, senators John Cornyn and Mark Warner urged India to instead adopt a “light touch” regulatory framework that would allow data to flow freely across borders.
The letter comes as relations between Washington and New Delhi are strained over multiple issues, including an Indo-Russian defence contract, India’s new tariffs on electronics and other items, and its moves to buy oil from Iran despite upcoming US sanctions.
The letter is most likely a last-ditch effort after the RBI told officials at top payment firms this week that the central bank would implement, in full, the directive.
The Telegraph
