The Economic Times - 12 October 2019
India wants data localisation in RCEP for security interests
By Kirtika Suneja and Dinesh Narayanan
India has proposed locating computing facilities inside the country if it is meant to protect its essential security interests and national interests at the the ongoing negotiations of the proposed Regional Comprehensive Economic Partnership (RCEP) trade agreement.
New Delhi also said that the participating countries may prevent cross-border transfer of information by electronic means, including personal information, only where it is “necessary to achieve a legitimate public policy objective” or “necessary, in the country’s opinion, for the protection of its essential security interests or national interests”.
India’s alternate proposal on the Asean Package for the agreement’s e-commerce chapter came on Friday after 14 members of the 16-country RCEP including ASEAN opposed data localisation. China was not a proponent.
However, in the financial services chapter of the agreement, India is learnt to have agreed to financial data transfer in talks held in Vietnam in late September. It is believed to have agreed that financial services companies will be allowed to move and store data of Indians abroad.
The proposal is crucial as the Reserve Bank of India’s (RBI) in its April 2018 notification mandated “all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India”. It later clarified that a copy of domestic data can be stored abroad in the case of cross-border transactions. The financial services agreement (FSA) will partly nullify that position.
Interestingly, although the FSA was negotiated by the RBI, the contact point for the FSA is the commerce ministry and not the central bank.
In today’s proposal, India also said that “no party shall have recourse to dispute settlement for any matter relating to electronic commerce arising under any of the chapters/ any provision in this agreement”.
However, no data related issue has been finalised, officials said even as the RCEP talks reach their final stages before being concluded next month. Commerce and industry minister Piyush Goyal is attending the RCEP ministerial meeting in Bangkok from October 11-12.
“Asean has moved a compromise proposal that is being discussed. No issue has been settled including on data transfers,” said an official.
The Ministry of Electronics and Information Technology has approved the proposal, sources said.
While the commerce and industry ministry had called for strict data localisation norms in its draft ecommerce policy, the electronics and information technology ministry is working on the Personal Data Protection Bill and has become the nodal agency for all data-related matters.