Govt, RBI promise to address concerns on data localization rule2 min read . Updated: 18 Jun 2019, 11:30 PM IST
- Tech firms say storing data on Indian servers would increase their costs
- Industry has sought clarity on classification of data in the data protection bill
New Delhi: The government and the Reserve Bank of India (RBI) will address all the concerns of technology and e-commerce firms around India’s data storage and protection norms and new legislation that are in the pipeline, an official statement said on Tuesday.
The assurance comes after commerce and industry minister Piyush Goyal met representatives of technology and e-commerce firms on Monday along with senior officials of various ministries and RBI deputy governor B.P. Kanungo.
Goyal asked e-commerce firms to give their suggestions in writing to the department for promotion of industry and internal trade within 10 days.
“All the companies who were represented in this meeting put forth their concerns related to the data storage requirements and processing related guidelines issued by the RBI. Deputy governor of RBI B.P. Kanungo, assured the industry representatives that the Reserve Bank of India will look into this," the statement said.
RBI had in April last year asked payments firms to adhere to data localization norms, suggesting these companies had to store data on Indian servers only. They were given six months to comply with the banking regulator’s order. While foreign companies are adhering to RBI’s data localization rules, they have maintained that storing data on Indian servers would require setting up data storage infrastructure in the country, which would increase their costs.
Ajay Prakash Sawhney, secretary in the ministry of electronics and information technology which drafted the Personal Data Protection Bill, 2018, said the final version of the bill will reflect all the consultations. The Indian e-commerce industry has large US corporations as well as Indian firms, many of which have foreign funding.
Representatives of companies such as Google, Facebook, Amazon, Mastercard, Visa, Paytm, Ola, Flipkart and Snapdeal were present at the meeting. The US wants India to eliminate trade barriers for American companies and remove restrictions with regard to data localization to cut the cost of doing business in India, news agency PTI reported earlier this month quoting visiting US commerce secretary Wilbur Ross.
On Tuesday, the Competition Commission of India said it was studying the e-commerce market and will come out with its findings in the third quarter.
“For many startups, aggregate data is the only intellectual property right they have and, therefore, the government or citizens cannot have a sovereign right over it. However, citizens should have full right over the individual private data they share and the company must be held accountable for protecting it," said Sachin Taparia, founder and chairman, LocalCircles, an online community of businesses and consumers.