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GK of the day: What is Data Localisation and India’s stand?

GK of the day: What is Data Localisation and India’s stand?

Data localisation laws refer to regulations that dictate how data on a nation’s citizens is collected, processed and stored inside the country.

Why India advocating Data Localization?

Data localisation is critical for law enforcement.

Access to data by Indian law agencies, in case of a breach or threat, cannot be dependent on the whims and fancies, nor on lengthy legal processes of another nation that hosts data generated in India.

If data generated in India is stored in the U.S., for example, it is dependent on technology and channels such as the undersea fibre optic cable network. Such reliance can be debilitating in the case of a tech or physical breakdown.

Currently, the only mandatory rule on data localisation in India is by the Reserve Bank of India for payment systems. Other than this, there are only reports or drafts of bills that are yet to be signed into law.

Why Companies are reluctant to comply?

The disadvantage for a company compelled to localise data is obvious — costs, in the form of servers, the UPS, generators, cooling costs, building and personnel.

Companies feel that infrastructure in India is not yet ready to support this kind of ecosystem. For any large e-commerce player in India, costs may go up between 10% and 50% depending on how stringently the final law is worded.

It is well known that Canada and Australia protect their health data very carefully.

Vietnam mandates one copy of data to be stored locally and for any company that collects user data to have a local office, unlike the EU’s GDPR; citing national interests, China mandates strict data localisation in servers within its borders.

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