dialogueDecember 8, 2018


The Dialogue has launched its in-house study on the impact of data localisation policies, titled ‘Data Localisation in a Globalised World: An Indian Perspective’, at the Constitution Club of India.

The study argues that cross-border data flows are fundamental to the growth of the global economy. By examining different aspects of data localization such as security, costs, international approaches, and a sectoral analysis, the study concludes that localization is not a viable means to the end that it is designed for. Instead, there are better alternatives available to improve law enforcement and ease of access, which would accomplish the same results without necessarily compromising on the prospects of growth.

The report developed through primary and secondary data analysis has forecasted a loss of GDP upto 1 percentage points in the short and medium term if India goes ahead with forced data localisation in its current avatar. The report also suggests that localisation may cost an average Indian worker upto 11% of his/her salary.

A lot of interesting insights were generated from the discourse. The event featured speakers that ranged from lawyers, government stakeholders, academia, cybersecurity professionals, public policy think tanks and media houses.

The keynote speech was given by Lt. Gen. Dr. SP Kochhar, AVSM, SM, VSM, CEO, Telecom Sector Skill Council of India, National Skill Development Corporation, Ministry of Skill Development, Government of India.

“There are two sets of the world – one is borderless and the other is border-limited. The borderless world is a globalized one. If we look at the factual data, it consists of Time and Space. In the borderless world, time has shrunk while the space has expanded (we can access any information through the internet in no time.) whereas in a border-limited world, although the time has shrunk, but the space still remains out of bound,” said Lt. Gen. Dr. SP Kochhar.

On Data Localisation, he outlines the lack of infrastructural capabilities in India. He raises some important questions on the sustainability of data localisation. He asks, “What are the things that are required for the government to achieve data localisation? There has to be a means to access and protect the data. Even if world-class data centers are put in place along with the best broadband capabilities, will it be able to persist the exponentially growing data generation? Can we guarantee a 24-hour power supply to these data centers? Do we have indigenously developed softwares and cybersecurity tools to secure the data?”

The keynote session was followed by a panel discussion on Data Localisation: Impact and Way Forward that was moderated by Mr. Kazim Rizvi, The Dialogue. The panelists included Mr. Saikat Dutta, Asia Times; Mr. Ananth Padmanabhan, Centre for Policy Research; Mr. Venkatesh Krishnamoorthy, BSA Software Alliance and Mr. Ashish Porwal, Hreem Legal.

The panel focused on three key areas where data localisation will have impact – Geopolitics, trade and policy analysis. The founding director of The Dialogue, Mr. Kazim Rizvi, in his press release stated, “For India to become a Vishwa Guru, we must follow the principles of a free-market economy. Our approach towards data should be to maximise the potential of cross-border data flows. Rather than deploying a strict hand of forcing companies to store data in India through forced localisation, we should instead incentivise them to come, locate and process their data here. Moreover, to seek access of data for law enforcement, we should work with other countries on a bilateral level and enhance our domestic privacy regime to meet global standards under international privacy frameworks. Now is the time to integrate more with the rest of the world and abandon protectionist policies that can hinder our long-term growth.”

Mr. Venkatesh Krishnamoorthy of BSA Software Alliance started the panel discussions by pointing out how cross-border data flow is equally (if not more) an important topic while discussing data localisation. He says, “Will data localisation enhance security? Look at it from a consumer’s perspective. Localisation of data will lead to an increase in cost to the consumer”. He further gives an example of credit card transactions happening worldwide because of free encumbered cross-border data flow. “The credit card transaction happening in, for example, Singapore, is because of cross-border data exchange. Another example that could be taken is how cross-border data flow prevents cyber attacks originating in one part of the world. Through data sharing, these attacks can be identified.”

According to Mr. Krishnamoorthy, a major hindrance to data localisation is the fragmentation of data spread across the world.

Continuing the panel discussions, Mr. Ananth Padmanabhan of CPR says, “Data localisation is not a policy vs policy debate. It is a policy vs principle debate. In a globalized world, internet freedom has been tightly blended in every user. With the verdict on Aadhaar and Right To Privacy, there is a triple test before the State goes further in implementing localisation. The three points to keep in mind before implementing a regulation like this are: 1) Law, 2) Legitimate state claim, and 3) the least restrictive measures employed.”

Extending on the aforementioned points, Mr. Saikat Dutta, Asia Times spoke, “Data Localisation is like an onion ring. The more you peel, the more layers can be found. For an informed decision making, should we consider data localisation or metadata localisation?” He speaks about the concerns surrounding data localisation and its impact on trade and innovation, “Data Localisation will restrict competition and will curb innovation and innovative economy. Is it possible to create the next billion dollar company like Facebook with such a regulation is place? The answer is no.”

Mr. Ashish Porwal from Hreem Legal draws parallel between the Preamble and The Personal Data Protection Bill, 2018. He states, “If privacy is a fundamental right, it means that the data principal should have a complete control over the data”. He points out the importance of an informed consent framework. He says that this discourse can also be interpreted differently. “Looking at it from a different perspective, in a way, The Bill is violating privacy.”

On MLATs and data sharing agreements, key outcomes from the discussion were reforms needed; both structural and contractual. Mr. Dutta says, “MLATs have gotten better in the past one year. If we see, the majority of MLATs signed in the world are with the US. The understanding between our (Indian) authorities and US has improved. India should actively participate in global discourse and discussions arising from the Budapest Convention.” He recommends having permanent officials who would work just towards MLATs and data access. Mr. Kazim Rizvi intervenes and states how the TRAI consultation paper has completely done away with data localisation and instead focused on data sharing agreements under CLOUD Act. Extending the points on MLATs, Mr. Ashish recommends structuring the whole process of drawing out MLATs and accessing the data. “If we read the current MLATs, there are no specific timeline on getting the data back to the LEAs. Also, there is no specific authority that can be held accountable.”

Kindly click below to view the study:

Data Localisation in a Globalised World

About us

India is marred with a complex social, economic and political structure, which requires innovative solutions to solve the most difficult problems of today. India is also a land of opportunities despite its challenges, mainly due to its demographic dividend and cultural diversity.