Macro/Finance Group, NIPFP

Data localisation in India: Questioning the means and ends

Data localisation in India: Questioning the means and ends, Rishab Bailey, Smriti Parsheera. NIPFP Working Paper 242, October 2018.

The subject of data localisation has garnered significant attention in recent policy debates in India. This paper classifies the arguments around data localisation into three broad categories - the civil liberties perspective; the government functions perspective and the economic perspective. We examine the likely costs and benefits under each of these heads and come to the conclusion that it would be premature to adopt any sweeping localisation norms in India. At the same time, India must not will away its ability to adopt such measures in future by agreeing to sweeping 'free flow of data' provisions in trade agreements. The identification of cases where narrowly tailored localisation requirements might be an appropriate response should be done through a transparent and consultative process. Where an assessment of the over all costs and benefits justifies a case for localisation, it should be adopted in its least intrusive form.