DATA LOCALISATION
1. Context
Most countries mandate data created within their borders remain stored within its borders. Such stringent laws, while allowing governments and their law enforcement agencies to work more efficiently, will result in the hindrance of global trade and increase the operational costs of businesses.
2. Data Localisation
- Data localization, in general, refers to the process of physical storage of data within the national boundaries of the country, where its processing is done at the local level, within the country, governed by the laws of the land.
- India's mandatory data localization position has garnered support from United Nations-backed bodies, marking a shift towards genuine concerns as expressed in many quarters. The United Nations Conference on Trade and Development (UNCTAD) in its Digital Economy Report 2019, observed that government may choose to restrict data flow for the reasons of privacy of data and protection of their citizen's interest in security and development.
- India is one of the most powerful markets in terms of data creation and use, and the need for data localization is essential. The recently withdrawn Bill on data protection also emphasized this fact. While some governments may feel that such a move "will serve as a significant barrier to digital trade".
- There is a necessity for such requirements as law enforcement agencies in India face a lot of difficulties in getting timely access to data that may be stored elsewhere by businesses operating in India. In a similar pattern, due to the increasing number of digital payments in the country, the Reserve Bank of India has also mandated payment system data information to be stored in India for better monitoring and safety.
3. Importance of Data Localisation
3.1 Protecting Personal Data
The personal and financial data which is available on the cloud is subject to foreign surveillance. The issue of Cambridge Analytica (who are alleged to have influenced voting behavior, and thereby the outcome, on data.).
Data harvesting threats and better control on the nature of the use of Data, the extent of use.
3.2 Economic Aspect
India would have a competitive edge over the local companies, in the case of localized data. The information capital available to the domestic market and company in specific will be profitable for them.
The government can tax the revenue generated from the data, wherever feasible, akin to taxation on the inflow and outflow of goods and services. Job Opportunities within the country will rise for the data analytics sector and thus, witness economic development.
3.3 Law Enforcement Issues
Storage of data at a local location facility accesses to information by the authority when needed. Local Storage of data is necessary for smooth law enforcement, without any additional measures.
3.4 National Security Dimension
Law enforcement agencies often require information while investigating crimes. Local storage of data can help these authorities to access it promptly. When data is not stored locally, agencies have to access the Data through Mutual Lega Assistance Treaties (MLATs). Countries sign agreements under this, intending to aid each other in the legal processes of respective countries. In some cases, it delays the investigation of crimes.
4. Challenges of Data Localisation
- Lack of proper infrastructure required to collect and manage data.
- Localization of data can address foreign misuse, but the threats and risks involved in the domestic management of data are valid concerns.
- When data is stored within the country, then the government will have to work on the functioning and effectiveness of payment system operators, incurring a much higher operational cost than usual.
- Difficult for small-scale firms, and startups to scale up their operation for creating local storage infrastructure.
- Inadequate infrastructure can hamper the paramount objective of localization, i.e., security.
- Could be a time-consuming process, where easy and profitable offshore cloud host services are available.
5. Personal Data Protection Bill
The Ministry of Electronics and Information Technology, Government of India, formed a committee under the chairmanship of retired supreme court judge, Justice B.N.Srikrishna.
The Committee aimed to comprehend and formulate data protection laws and drafted the Personal Data Protection Bill.
It applies to the processing of personal data by companies registered in India, foreign companies dealing with the personal data of individuals in India, and the Indian Government.
6. A Multiple Stakeholder Approach
- Data is the enabler of businesses and digitization that has been essential for growth and innovation. In this age of rapid technological growth, governments should shift to alternate standards (such as encryption) rather than enforcing strict measures on data localization that could restrict trade and innovation.
- One should also reflect on how far we can go with a sovereignty-based model in a digitally connected world. It has become increasingly troublesome to solve jurisdictional issues in case of cybercrimes and online defamation which rely heavily on international cooperation between countries, making it difficult and expensive for prosecutors to act.
- Therefore, a way forward could be to move with a multiple-stakeholder approach which can not only help in looking at data localization alone, but also other issues such as privacy and governance.
- The 'glocalization' approach is one such method in the digital space, wherein law can be harmonized globally, but by paying attention to local interests. Last but not the least, with the passing need for data localization by the government, it becomes important to assess the security of domestic systems for storing sensitive data.
For Prelims & Mains
|
For Prelims: United Nations Conference on Trade and Development (UNCTAD), Personal Data Protection Bill, Digital Economy Report, Mutual Lega Assistance Treaties (MLATs),
Justice B.N.Srikrishna Committee.
For Mains:1. What is Data Localisation? Explain why data localization is important in the present technological age.
|
Source: The Hindu
