US President Donald Trump sent a distinct message to India and China over their request on data localization, claiming it impedes digital trade flow. He said at a special session on Digital Economy organized as part of the G-20 summit in Osaka of Japan today, “US seeks a free flow of data. and is eager to work with like-minded partners ” indicating a tough stance on another area where Washington and New Delhi are at odds.
US President Trump said, “ American success in the digital economy is based on the free flow of data, strong privacy, and intellectual property protection, access to capital and innovation”. He also added, “The United States is committed to sustaining this approach to digital trade long into the future. We are eager to work likeminded partners around the world to advance these priorities ”.
India has said that it wants foreign companies for storing data – personal, financial and social which are assembled by search engines, financial platforms or social media sites -locally. The government has also pledged a revision of e-commerce rules – a stance that has warned US technology and also financial giants maneuvering in the country.
This directs the companies will have to store and process data from Indian consumers in India and not abroad, as is recently the practice. For US firms, the new regulations would prove high-priced as satisfying would mean setting up brand new infrastructure in India.
While the government has figured out a draft policy, the Reserve Bank has said foreign payment firms such as Mastercard and Visa can process transactions made in India outside of the country but should retrieve data for local storage within 24 stores within 24 hours.
In the latest report, the US Trade Representative professed the government agency responsible to develop and prescribe its trade policy and also said the move of India is “ discriminatory and trade-distortive” and said the US boldly recommends India to re-evaluate it.