India urged to soften data localisation stand

US senators’ letter comes as relations between the two nations are strained

Two US senators have called on Indian Prime Minister Narendra Modi to soften India’s stance on data localisation, warning that measures requiring it represent “key trade barriers” between the two nations.

In a letter to Modi dated on Friday, US Senators John Cornyn and Mark Warner — co-chairs of the Senate’s India caucus that comprises over 30 senators — urged India to instead adopt a “light touch” regulatory framework that would allow data to flow freely across borders.

The letter comes as relations between Washington and New Delhi are strained over multiple issues, including an IndoRussian defence contract, India’s new tariffs on electronics and other items, and its moves to buy oil from Iran despite upcoming US sanctions.

Global payments companies have been lobbying India’s finance ministry and the Reserve Bank of India to relax proposed rules that require all payment data on domestic transactions in India be stored inside the country by October 15.

The letter is most likely a last-ditch effort after the RBI told officials last week that the central bank would implement, in full, its data localisation directive without extending the deadline.