US Trade Representatives have slammed India’s restrictions on e-commerce policy and attempts to mandate data localization requirements.
“In 2018, India published a number of measures that would restrict the cross-border flow of data and create onerous data localization requirements. Last year in October, one such measure was executed, requiring payment service suppliers to store all information related to electronic payments by Indian citizens within India,” USTR said.“Much broader restrictions included in India’s draft Personal Data Protection law and draft e-Commerce Policy threaten to undermine the digital economy as a significant source of growth for India.”
The draft policy planned to regulate cross border data flow, banning sharing of data of Indian users stored abroad with third-party entities. It also instructed all e-commerce companies to have data stored in India. The associations have strongly opposed the proposal to give the government access to the source code and algorithms of e-commerce industries.
“The US has urged India to work to address the common problem of excess capacity in the global steel and aluminum sectors, rather than engage in unjustified retaliation, designed to punish American workers and companies. The US will take all necessary action to protect interests in the face of such retaliation,” National Trade Estimate Report said.
The USTR report is crucial for some of the recent moves on data protection. “An only-in-India data storage requirement will hamper the ability of service suppliers to detect fraud and ensure the security of their networks. These data localization provisions would damage the digital economy without supporting privacy. When the governments impose barriers to cross-border data flows or discriminate against foreign digital services, local firms are often hurt the most, as they cannot take advantage of cross-border digital services that facilitate global competitiveness”, USTR said in the statement.