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Opposition to data localisation may reduce after taxation framework for internet companies come into place: MEITY’s S. Gopalakrishnan

Opposition by foreign companies to India’s data localisation move may come down once a globally accepted framework of taxing digital companies comes into place, according to S. Gopalakrishnan, joint secretary to the IT Ministry. He was referring to a recent proposal by the Organisation of Economic Cooperation and Development (OECD) to expand the governments’ rights to tax MNCs especially big internet firms such as Google and Facebook by releasing a methodology for such taxation.

Gopalakrishnan was speaking at a panel discussion on ‘Data Localisation and Global India’ at the India Mobile Congress 2019. He also said that the draft Personal Data Protection Bill is very likely to be tabled in the upcoming Winter Session of the Parliament.

Data embassies/zones to manage Indian data

The government may think about creating data zones/embassies in other countries to manage Indian data outside of India, Gopalakrishnan said. He further noted that the draft PDP bill requires a framework for localising critical data, and “not the trivial non-personal data”.

“There is 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 stakeholder views into consideration.

US is framing privacy laws, so India’s law shouldn’t come as a shock

Speaking on opposition by big tech firms on the draft Personal Data Protection Bill, 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 [in the US] have come out with privacy laws and [a] federal privacy law is expected.”

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Under such circumstances, the legislation of privacy law in India should not come as a surprise or a shock to them”. He also said that the biggest beneficiaries of the data localisation in India will be the “citizens of the country”, as this will protect their data from being misused.

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