Two US Senators Call On India To Relax Data Rules

U.S. Senators John Cornyn and Mark Warner, co-chairs of the Senate India caucus, sent a letter to India’s Prime Minister Narendra Modi urging him to soften his stance on rules that require customer data to be stored locally.

Reuters, citing the letter, reported the Senators urged Modi to have a lighter touch in the customer data storage regulatory framework so that data can flow freely across borders. The Senators warned that requiring the data stored locally amounts to “key trade barriers” between the two countries, reported Reuters.

The letter comes at a time when global payments companies such as Mastercard, Visa and American Express have being trying to get the finance ministry in India and the Reserve Bank of India to scale back rules that require payment data of domestic transactions to be stored inside India by a deadline of October 15. “We see this (data localization) as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership,” the U.S. senators said in the letter, according to Reuters.  The letter may not have much impact, since officials in India told the executives at the payment companies last week that the central bank is implementing its data localization directive without extending and deadlines or letting data be stored both in India and outside the county.

India is also working on a law that would require all personal data be stored in India, while Reuters noted eCommerce and cloud computing rules are also being created. Tech companies are worried the rules will increase the costs of infrastructure, hurt their global fraud detection platforms and impact investments already planned in India at a time when Internet usage is growing in the country.  Reuters noted that Shamika Ravi, a member of Modi’s economic advisory council, said earlier that the laws are in the “long-term strategic and economic interest” of the country.