The US wants to prohibit data localisation to ensure that there is a free flow of information across borders, a senior Trump administration official has said, amid reports that major American IT companies are up in arms against the latest Indian directive which kicks off next week.
Data localisation is an act of storing data on any device that is physically present within the borders of a particular country where the data was generated.
The Reserve Bank of India (RBI), in a circular in April, said all system providers will have to ensure that the entire data relating to payment systems operated by them are stored in a system only in India.
It gave time till October 15 to comply with the mandate.
“We want to have prohibitions on data localisation to ensure that there’s free flow of information, free flow of data across borders, disciplines around countries requiring companies to give up their source code, permanent ban on taxation or duties on digital transmissions,” Dennis Shea, Deputy US Trade Representative and US Ambassador to the WTO, told a Washington audience on Friday.
“And by the way, South Africa and India want to rethink the current moratorium on those duties,” Shea said in response to a question at the Center for Strategic and International Studies (CSIS), a top American think-tank.
American financial companies are believed to have approached the administration against an RBI directive which, beginning October 15, requires them to store in India any payment-related data from transactions that take place inside the country.
India has rejected their request of mirroring.
“If implemented, this policy will put an unnecessary burden on American companies and hurt consumers, who will endure higher costs and increased cybersecurity risks,” Republican Strategist Andy Surabian, who is also a political adviser to Donald Trump Jr, wrote in BreitBart News this week.