New Delhi: US ambassador to India Kenneth Juster on Thursday batted for free flow of information across borders against the backdrop of India asking foreign companies to store data locally—a point of friction between India and the US.

In a speech on connectivity in the Indo-Pacific region, Juster said that the free flow of information across borders via the internet drives productivity, growth, and innovation.

“For that reason, we urge India and other countries to remain cautious in enacting data localization and data privacy legislation which certainly can address legitimate privacy concerns but, if not done carefully under the involvement of all stakeholders, can also unnecessary restrict data flows, cause unnecessary regulations, and disrupt connectivity," Juster said.

The Reserve Bank of India has told all payment firms like MasterCard, Visa, American Express and PayPal to store their India-related data locally.

Google and WhatsApp are also mandated to store data locally for their payments-related businesses. The deadline for submission of compliance reports by these firms ended on 15 October. Though more than 60 companies have complied with the Reserve Bank of India (RBI) directive, some of the big global entities operating in India have sought relaxation from the central bank.

Indian foreign secretary Vijay Gokhale in his speech at the same event did not refer to the data localization issue but said he saw good prospects for cooperation with the US and Japan to build economically viable infrastructure projects across the Asia-Pacific region —in a sign of increasing synergy among the three in their bid to present an alternative to China’s Belt and Road Initiative.

He also pitched the Chabahar Port that India is developing in Iran as part of its connectivity projects linking its extended neighbourhood—days ahead of the US reimposing sanctions on Iran.

India’s efforts to build connectivity can only succeed in “synergistic partnership with other countries sharing the same purpose and objectives. I am happy to note a similar level of ambition, effort and purpose by the US and other countries like Japan," Gokhale said.

“Coordination of connectivity efforts in third countries forms an essential part of our trilateral cooperation with the US and Japan. We see prospects for more impactful cooperation following the passage of the BUILD Act in the US Congress. Similarly, India and Japan are committed to working on the Asia-Africa Growth Corridor," he added