Undeterred by lobbying against mandatory data localisation for all global companies operating in India, the Ministry of Information Technology (IT) and Electronics plans to go ahead with the norms as announced in the draft version of the Data Protection Bill.

The Centre reiterated its stand following a report that the US digital industry's lobbying body, Internet Association (IA), is trying to influence the US trade representative to classify the data law as an anti-trade barrier.

Official sources also said that it is incorrect for a US business lobby to look at the proposed law in this manner. The purpose of the new law is to make Internet transactions more robust and transparent. As the volume of such transactions increases in India, it will be important to prevent fraud and secure the privacy of user data.

This will be India's first bill on the critical issue of data protection.

"International ramifications of the policy will be kept in mind while finalising the bill. Data localisation norms will be spelt out more clearly and be precisely defined in the final version," a senior official from the ministry said.As per the draft bill, it is mandatory to only store critical personal data, not all data, in India, the official clarified.

The Reserve Bank of India (RBI) had set a deadline of October 15 for all payment companies to comply with localisation norms. Several foreign companies, including MasterCard, American Express, Visa and PayPal, have been lobbying with the Centre and banking regulator to relax the norms, but RBI has not relented.

An IT ministry official said this will serve as a role model for all sector regulators to follow data localisation norms.

The ministry has received about 650 responses so far to the draft version of the data protection Bill submitted by Justice BN Srikrishna Committee in July this year. The respondents include the US-India Business Council, US-India Strategic Partnership Forum and other global associations.

A final version of the Bill is expected to be introduced in the Parliament in the upcoming winter session.

"This will be a model Bill for countries across the globe," another official from the ministry said, "India is the fastest growing economy and is among the biggest markets for multinationals across Internet, e-commerce and allied sectors. MNCs will have to adhere to our rules and regulations just as Indian companies have followed EU recent GDPR (General Data Protection Regulation)."

The Srikrishna committee had recommended storing one copy of all personal data in India, while critical information can be stored only locally. However, the definition of 'critical personal data' has been left for the government to decide.

On Friday, DNA reported that the IA red-flagged trade restrictions in India to the Office of the United States Trade Representative (USTR). USTR is the government agency responsible for developing and recommending trade policy to the president of the United States. IA's complaint is that many policies create market access barriers for doing business in India.

India is quickly emerging as the largest market for global Internet companies. Just the E-commerce sector is expected to reach $200 billion by 2020. India is also progressing rapidly on adoption of 5Generation technology and access to the Internet will be through mobile and apps. Chinese and American Internet firms are looking at India as a crucial market for dominance. In the Internet world, the top player takes the bulk of the revenues and very little is left for the second or third player. Hence, capital is being pumped by both, established players and private equity funds, into the country.

Indian start-ups, that are going global, may not be able to leverage global cloud platforms and will face similar barriers as they expand in new markets. Recently, Google CEO Sundar Pichai wrote to Ravi Shankar Prasad, the Minister for IT and Electronics, saying, "Free flow of data across borders – with a focus on user privacy and security—will encourage start-ups to innovate and expand globally, and encourage global companies to contribute to India's digital economy."

About Data Protection Bill

• As per the draft bill, it is mandatory to only store critical personal data, not all data, in India to prevent fraud and secure privacy
• Purpose of the new law is to make Internet transactions more robust and transparent. Its final version is expected to be introduced in the Winter session