Opposition to data localisation may come down after international tax law: Official

NEW DELHI: Opposition to India's data localisation move from overseas companies may go down once a globally accepted framework of taxing big technology and digital companies comes into place, a senior IT ministry official has said.

Gopalakrishnan S, joint secretary in the ministry of electronics and IT, told the India Mobile Congress on Wednesday that he was referring to a recent proposal by the Organisation for Economic Cooperation and Development (OECD) to expand government rights to tax multinationals, especially big internet firms, by releasing a methodology for such taxation.

The official said that according to the draft personal data protection (PDP) bill, the law would only set up the framework regarding necessarily localising ‘critical data’ only in India without a copy of it being elsewhere.

But “there will be a lag between the coming of the law and the implementation since the regulator would then work out the nitty-gritty of what comprises critical data and thus needs to be stored only in the country,” he said, adding that the entire process would take all the stakeholders into consideration.

The officer further clarified that even then, the law would allow the Indian government in the meanwhile to strike bilateral data treaties with other countries wherein companies from the partner countries could even store the critical data overseas.

Gopalakrishnan was chairing a session on Data Localisation and Global India. His comments came during a panel discussion on how some big technology giants were opposed to the Indian government’s proposed data localisation rules as outlined in the draft PDP bill, which the senior government official said, could soon be tabled in the Parliament.

Speaking on the opposition from big technology firms on proposed Indian laws around, privacy and security, Gopalakrishnan said, “the global tech companies have so far operated in a regime without specific privacy laws in the US but are now facing a situation where there are six states that have come out with privacy laws and a federal privacy law is expected. Under such circumstances, legislation of a privacy law in India should not come as a surprise or a shock to them”.

The discussion comes at a time when the draft of the data privacy bill has been firmed up and the government is now working on how to treat non-personlised data.