December 9, 2022 l By Anand Raghuraman
With its latest draft data privacy bill, India has opened up intriguing possibilities for a shift in global digital diplomacy—a new alignment between New Delhi, Washington, and Brussels that could reinvigorate digital trade and reshape the rules of the road in the digital economy. The key to it all is India’s new approach to data localization, which could soon permit cross-border data flow into “certain notified countries.”
However, India’s data localization pivot also raises two obvious questions. Which countries will India deem safe for cross-border data flow and what factors will it consider in making those judgements? India’s draft bill is silent on both matters, stating only that “an assessment of relevant factors by [the] Central Government would precede such a notification.” Final legislation or subsequent implementing regulations will need to offer clarity.
This process puts India squarely in the driver’s seat. For example, India could choose to whitelist strategic partners like the United States or European Union on the basis of shared values and national security interests. It could require that whitelisted countries have a sound data protection framework that provides suitable protection to Indian data transferred overseas—just as the EU has adequacy standards under the General Data Protection Regulation regime. It could even leverage the whitelist as a bartering chip in bilateral trade talks with the European Union and the United States.
The possibilities are vast, but they do not eliminate the need to make choices and move swiftly. India will hold the G20 presidency in 2023 and look to elevate digital cooperation as a centerpiece of its global agenda. While the Indian government is likely to prioritize efforts to export India’s model of digital public goods, there is a clear opportunity to forge a baseline consensus on cross-border data flows, perhaps through a reimagined “DFFT 2.0” framework or a flagship “New Delhi Digital Compact.” This would be a lasting achievement for India’s G20 presidency and one that could help knit together the US, European, and Indian digital ecosystems in the years to come.
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