Blacklist more open than whitelisted data

Data protection legislation being drafted may set out a negative list of countries where personal data cannot be transferred. This is an improvement over an earlier proposal for the government to allow personal data to be stored outside the country only in jurisdictions of its choosing. One of the reasons a previous version of the Data Protection Bill was recalled was because businesses objected to stringent localisation criteria for storage, processing and transfer of data. A blacklist of nations for data export addresses this reservation better by being less restrictive than a whitelist, apart from being easier to implement. It also establishes India’s credentials as a leading player in the digital economy by keeping trade barriers low.

India has ambitious plans to ramp up local data processing capacities. This would require some degree of reciprocity with countries India chooses to share personal data with. An open data policy involves harmonised protection of consumer rights and requires a common framework on access to new sources of data. Setting the default option to share plays into India’s data processing strength as the trade in adding value to raw data increases. The country is positioning itself as a major exporter of refined data, and it makes sense to allow unhindered data flows so that it can acquire a competitive advantage. Besides, India should not find itself excluded from sectoral data-sharing arrangements among countries on account of localisation restrictions.

India also enjoys data gathering benefits by virtue of the size of its consumer market. Digital markets are obliterating traditional distinctions among markets and geographies. Cross-border data flows will provide domestic industry access to deeper insights into consumer behaviour. Data-sharing across industries is expected to promote competition by creating a common pool of anonymised raw data accessible to all with freedom to run analytics for consumer behaviour. An open approach to data transfer with adequate safeguards will play a big role in India’s digital transformation.