US tech giants to fight data localisation plan

US technology giants plan to intensify lobbying efforts against stringent Indian data localisation requirements, which they say will undermine their growth ambitions in India, sources told Reuters.

US trade groups, representing companies such as Amazon, American Express and Microsoft, have opposed India’s push to store data locally. That push comes amid rising global efforts to protect user data but is one that could hit planned investments by the firms in the Indian market, where the companies currently have limited data storage. The issue could further undermine already strained economic relations between India and the US.

Technology executives and trade groups have discussed approaching Prime Minister Narendra Modi’s office to appraise him of their worries. Separately, the industry is considering pitching the issue as a trade concern, including at the India-US talks in September in New Delhi, according to two sources familiar with the matter.

Though a final decision hasn’t been made, the deliberations come while the US and India are locked in a dispute over US tariff increases and on the Indian policy of capping prices of medical devices, which hurts American pharmaceutical companies. “This issue is important enough to be discussed at the India-US trade level,” said Amba Kak, a global public policy adviser at the Internet company Mozilla Corp.

“Data localisation is not just a business concern, it potentially makes government surveillance easier, which is a worry.” Stricter localisation norms would help India get easier access to data when conducting investigations, but critics say it could lead to increased government demands for data access.

Technology firms worry the mandate would hurt their planned investments by raising costs related to setting up new local data centres.

Greater use of digital platforms in India for shopping or social networking have made it a lucrative market for technology companies, but a rising number of data breaches have pushed New Delhi to develop strong data protection rules.

Shamika Ravi, a member of Modi’s economic advisory council, said data localisation was a global phenomena and India wasn’t an outlier.