Washington: The US wants to prohibit data localisation to ensure free flow of information across borders, according to a senior Trump administration official. The comment comes amid reports of major American IT companies opposing the Reserve Bank of India’s (RBI’s) 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 is 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 companies time till October 15 to comply with the mandate.
US does not want firms to store data in India, other countries
“We want to have prohibitions on data localisation to ensure 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.”
American financial companies had approached the administration against the RBI directive.
India, however, 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.
“And they are planning to do all of this in spite of the unprecedented level of economic support the US has provided India over the course of decades. The Trump administration should stand up to these reckless actions, just like they have done in other situations when Americans were getting bullied.”
Mobile messaging platform WhatsApp recently said it had built a system to store payments-related data in India, in line with the RBI’s data localisation policy.