The Indian Data Protection Bill which, if passed and made into law, would force all foreign companies to store a copy of Indian users' data on servers hosted locally within India
After a year of deliberation and consultation with multiple think-tanks, the Justice Justice Srikrishna Committee submitted the much-awaited report on Data Protection and the draft Personal Data Protection Bill 2018 to Ministry of Electronics and Information Technology (MEITY) earlier this month. The initial draft has become rather controversial, with many industry experts pointing out multiple problems with the bill, but there is one, in particular, that seems to be getting attention from foreign corporates. The Personal Protection Bill outlines that companies would be required to store data (or a live copy of it) on a server in India.
As per a report by Reuters India, U.S. companies have expressed strong opposition to the requirement of storing Indian users’ data within India itself. This, they say, is extremely prohibitive to the business growth plans as companies would now be forced to invest in data centres in India instead of business expansion. The aim of the new regulation would be to also allow easier access to data for Indian authorities, which some fear, could also greatly increase the requests for data by the government. Amba Kak, a global public policy adviser at the Internet company Mozilla Corp said that “data localisation is not just a business concern, it potentially makes government surveillance easier, which is a worry.”
Given the impact on future investments and business growth, the Data Protection Bill will lead to added stress on Indo-US trade relations, which have already been strained due to India capping the price of medical devices being imported from the U.S. Reuters reports that the new development is significant enough to be part of the U.S.-India discussions taking place in September. Additionally, American firms such as Facebook, Microsoft, Mastercard, Visa, Amazon and more are going to step up their lobbying efforts in order to make the Data Protection Bill more favourable. The Data Protection Bill is yet to hit the Parliament floor for debate and will only become law once it is approved.
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