Updated on 12 October, 2019
India’s hopes for retaining the right to implement data localization laws remain alive as Indian negotiators declined to agree to the e-commerce chapter of the RCEP agreement.
Transfers of information
- The negotiations are taking place in the meeting in Bangkok.
- Chapter 10 on e-commerce - If India agrees to the provisions of this chapter, as specified by most of the other countries, it will mean it won’t be allowed to impose data localization rules on companies looking to do business in India.
- This would go against the RBI’s norms on the localisation of payments data that it had ordered in April 2018.
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- The section on transfers of information and processing of information says that “a party shall not take measures that prevent transfers of information, including transfers of data by electronic or other means, necessary for the conduct of the ordinary business of a financial service supplier.”
- However, the same section also says that “nothing in paragraph 2 [the paragraph containing the previous clause] prevents a regulator of a party for regulatory or prudential reasons from requiring a financial service supplier to comply with domestic regulation in relation to data management and storage and system maintenance, as well as to retain within its territory copies of records.”
- This basically means that India cannot be prevented from asking financial companies to maintain a copy of their data within India, but it is unclear still whether India can mandate that such data must only reside within the country.
- Discussions on this and the other pending issues will continue till 13 October.