As India cracks down against them, US companies run to US President Donald Trump, plead for relief

There is extreme distress in US firms especially today - the Reserve Bank of India's data localisation deadline ends today. Data localisation is an act of storing data on any device that is physically present within the borders of a particular country where the data is generated, which in this case is India. During April month, the RBI in a circular stated that, all system providers will have to ensure that the entire data relating to payment systems operated by them are stored in a system only in India. 

The central bank had given time till October 15 to comply with the mandate.  According to Firstpost, the  US companies want Donald Trump administration to put pressure on Indian authorities for  relaxation of the RBI order of ensuring implementation of data localisation by 15 October. 

Reportedly, the US Senators John Cornyn and Mark Warner have appealed that the Indian government must address the concerns of American payment firms.  US companies have been lobbying with the Finance Ministry and the RBI over the issue. 

Further the report also revealed that, the notes on discussion revealing the reluctance of firms on storing all payment data on transactions inside the Indian territory. Financial services companies were ready to have data mirroring instead of data localisation, however, RBI had indicated that it was opposed to ‘mirror data’ and was pushing for a clause on storage of all transaction data in India only.

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The government source also reportedly said “A US firm even blamed that RBI was intervening too much in businesses of financial technology companies and such action was spoiling the Digital India story. They were also of the view that the national security agencies were helping RBI and directing its action. Though RBI had made it clear, it will not relax the deadline for payment companies."

What has been revealed is that, the US companies are suggesting two approaches - firstly, they want US government to put pressure on Indian authorities for relaxation of the deadline, secondly they even want the Trump administration to have a meet with the US industry in regards to evolving a solution without hampering their global business model.

Some of the US companies even tried communicating with RBI and offered to have data mirroring process, however, the monetary authority has not replied anything in regards to this.  Earlier, the US-based Centre for Information Privacy Leadership (CIPL) submitted their response on draft data protection bill to the Ministry of Electronics and Information Technology. This draft also included views on data localisation. 

The CIPL suggested that the Indian government encourage bilateral and multilateral instruments to make data sharing work in such instances without resorting to localisation, as per the report.