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The European Union is seeking unrestricted cross-border flow of data between itself and India, including allowing storage of data in the EU’s 27 countries, under the free trade agreement being hammering out by the two sides.

However, India is working on a data protection Bill which will have guidelines on data protection and data storage and cross-border flow of data.

The chapter on Data Flows and Personal Data Protection in the draft advance text of the FTA says that parties are committed to ensuring cross-border data flows to facilitate trade in the digital economy. It said these cross-border flows shall not be restricted—and free of restrictions like requiring localization of data for storage or processing.

It also talks about recognizing protection of personal data and privacy as a fundamental right and recognizing that high standards in this regard contribute to trust in the digital economy and to the development of trade.

In India, the Personal Data Protection Bill, 2021, which currently stands withdrawn, made the case for data localization, requiring that copies of sensitive personal data be available within India and conditions be put on cross-border data transfers. Experts had argued these rules would mean additional cost and infrastructure for companies.

The government on Wednesday withdrew the Personal Data Protection Bill, 2021 and said it would soon be replaced by “a comprehensive legal framework," that will be “designed to address all of the contemporary and future challenges of the digital ecosystem."

Aprita Mukherjee, professor, ICRIER, said, “India is an IT and ITes export hub where we process sensitive data in sectors like healthcare and finance for other countries and any policy may take that into account."

The UK entered into a data adequacy agreement with the EU post-Brexit, allowing for personal data to flow freely from the EU and the wider European Economic Area (EEA) to the UK. As a result, businesses and organizations in the UK can continue to receive personal data from the EU and EEA without having to put additional arrangements in place with European counterparts, as per the agreement, which in turn supports trade, innovation, investment and assists law enforcement agencies tackle crime.

An expert told Mint on condition of anonymity that a data protection bill introduced in 2019 was focused on personal data but a joint parliamentary committee report had sought to expand its scope to include non-personal data too. “Keeping the data in the country gives India more negotiating power as India is a huge market for data," he said. “There are also concerns with regard to the cyber sovereignty of the country. Lawmakers fear misuse of data."

India and the EU concluded the first round of negotiations for Bilateral Trade and Investment Agreements (BTIA), including Geographical Indicators (GI), on 1 July after talks were relaunched in June following a gap of nine years.

India’s team is led by chief negotiator Nidhi Mani Tripathi, Joint Secretary, Department of Commerce and the EU is being represented by its chief negotiator, Christophe Kiener. The second round is scheduled to take place in September in Brussels.

A department of commerce spokesperson told Mint that “the negotiations with the EU are in process and all areas of mutual interest are under discussion. It would be improper to speculate at this stage."

An EU official told Mint in an emailed response: "The EU aims to negotiate ambitious and comprehensive trade agreements modelled on the most recent EU trade agreements.

“These notably include meaningful market access for goods, services and government procurement, as well as ambitious and binding provisions on intellectual property rights, digital trade, and trade and sustainable development."

Beer, Wine, feta and gouda cheese, luxury cars, fisheries and farm items are among the key interest areas for the EU. India’s demands include greater access to the EU market for its skilled professionals.

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