Jun 30, 20192 min read

Free flow of the “New Oil” needs a check! By Bidisha De

Since April 2018, the term “Data Localization” has been lingering all around the news almost every day. Let’s get a brief idea about what this term means and why a broke person like me should be concerned anyway!

Introduction of Data Localization in India

Data Localization is nothing but the act of storing data within a country where it has been generated.

On April 2018 RBI came up with a circular on Data Localization. It was mentioned that by 15th October 2018 all the system providers storing data of Indian citizens abroad, are required to bring them back to India and store them in a local server. Most firms carried out what was instructed and some firms requested for an extension.

Recent clarifications made by RBI

According to the 2018 Personal Data Protection Bill, firms from abroad are allowed to keep the golden/master copy of the data in their own country but at the same time needs to store a silver/mirror copy of the data in India as well.

For data that includes online transactions between two Indian parties, there must be only one copy of the data, stored within India. In the case of cross-border transactions, a copy of the master data can be allowed to be stored abroad only after RBI agrees to it. For payments processed abroad, data stored in their servers are required to be brought back to India within 24 hours’ time period or one business day, whichever is earlier, since the time of the transaction.

A Good Decision?

With India going digital, most of our payment takes place online. These online transactions are mostly supported by USA based firms like Mastercard, Google, Amazon, etc. Data Localization will thus protect our privacy, as the data from these system providers will be stored in India instead of the USA.

But wait, what about the payments that are processed abroad? How will India keep track of such data and make sure that they are deleted from the servers abroad? Also, is it possible to set a timeline of 24 hrs on the data deletion process when the data is stored in a different country under different Government? Seems like RBI’s clarifications are going to arise more confusions!

Keeping aside the privacy of our data, the Indian Government can itself use these data to serve their own purpose. These data can be traded across borders, can be accessible to Indian firms and can actually contribute to our economy (especially the IT sector).

Everything comes with a Cost

There are definitely going to be bigger prices to pay in the future but for now, Data Localization will supposedly be paying the price of H1B Visas!

Amongst the 85,000 H1B Visas issued annually, Indian developers from firms like TCS, Infosys, etc. manage to get about 75 percent of them. However…

To be continued….