Let Indian users decide on data localisation: Experts

Experts have raised concerns over mandatory data localisation in India, arguing that consumers should have greater freedom to choose where their data is stored and warning that forcing companies to keep all data within the country could increase costs and restrict cross-border digital services.

The comments came amid the government's push for greater local storage of data. Experts participating in a roundtable discussion in New Delhi said data localisation could have implications for consumers, businesses and India's technology sector.

Venkatesh Krishnamoorthy, Country Manager at The Software Alliance, said consumers should be given the option to select the jurisdiction in which their data is stored. He suggested that different storage jurisdictions could be offered through a drop-down menu, allowing users to make an informed choice.

Shagufta Kamran of the US-India Strategic Partnership Forum (USISPF) said India's information technology and IT-enabled services sector had traditionally benefited from cross-border data flows. She cautioned that restricting such flows could have an adverse impact on the industry.

Amitayu Sengupta of the Internet and Mobile Association of India (IAMAI) pointed out that establishing and maintaining data centres requires substantial investment and resources. He said this had been one reason such infrastructure had not been widely developed in India in the past.

The experts were speaking at a roundtable organised by consumer advocacy group Consumer Unity & Trust Society (CUTS) International. Representatives from government, industry, consumer organisations, academia and the data protection sector participated in the discussion.

Legal researcher and consumer rights activist Dr Usha Ramanathan questioned the basis for demanding data localisation, arguing that it was not clear whether storing data within India would necessarily provide consumers with stronger security or better data protection.

Nikhil Pahwa, founder of Medianama, warned that mandatory localisation could create an uneven playing field between large and small businesses. Smaller companies, he said, could face a greater financial burden from requirements to establish or maintain local data infrastructure. He also argued that India did not have sufficient infrastructure at the time to support large-scale data centre requirements.

GV Srinivas, Joint Secretary for Cyber Diplomacy at the Ministry of External Affairs, said the data protection framework proposed by the Srikrishna Committee had made efforts to address consumer interests. He noted that the proposed regime could make it easier for law enforcement agencies to access important data when required.

Srinivas also acknowledged that companies could face higher costs due to data mirroring requirements, but said the broader benefits of the proposed framework would need to be considered.

Ashim Sanyal of consumer organisation VOICE took a stronger position against localisation, saying it could be anti-consumer by affecting the quality and cost of digital services. He also questioned whether keeping data within national borders would necessarily translate into stronger data protection.

The discussion highlighted the complex trade-off involved in data localisation. While local storage can potentially improve regulatory access and make certain forms of law enforcement easier, experts said policymakers also need to consider infrastructure costs, business competitiveness, consumer choice, data security and India's position in the global digital economy.