NEW DELHI - Two U.S. senators have called on Indian Prime Minister Narendra Modi to soften India’s stance on data localization, warning that measures requiring it represent “key trade barriers” between the two nations.
In a letter to Modi dated Friday and seen by Reuters, U.S. 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 Indo-Russian defense contract, India’s new tariffs on electronics and other items, and its moves to buy oil from Iran despite upcoming U.S. sanctions.
Global payments companies including Mastercard, Visa and American Express 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 at top payment firms this week that the central bank would implement, in full, its data localization directive without extending the deadline, or allowing data to be stored both offshore as well as locally - a practice known as data mirroring.
“We see this (data localization) as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership,” the U.S. senators said in the letter that has not been previously reported.
Modi’s office did not immediately respond to an email seeking comment. (Reuters)