India not ready to support free data flow concept: Goyal to G20 ministers

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September 23, 2020 8:20 AM

India is not in a position to endorse the so-called ‘Data Free Flow with Trust’ (DFFT) initiative across nations, as this concept “is neither well understood, nor comprehensive enough in the legislation of many countries”, commerce and industry minister Piyush Goyal told a virtual meeting of G20 trade and investment ministers.

piyush goyal, commerce minister, trade relations, exports, importsGoyal said there is a need to identify areas where sensible policies can help take exports to USD 1 trillion.

India is not in a position to endorse the so-called ‘Data Free Flow with Trust’ (DFFT) initiative across nations, as this concept “is neither well understood, nor comprehensive enough in the legislation of many countries”, commerce and industry minister Piyush Goyal told a virtual meeting of G20 trade and investment ministers on Tuesday. The DFFT concept for free flow of data was mooted by Japan in June last year, when it hosted the G20 Leaders Summit in Osaka. But it has not been widely supported by developing countries for a number of reasons, including concerns about data privacy.

In his address, Goyal said: “…in view of the huge digital divide among countries, there is a need for policy space for developing countries who still have to finalise laws around digital trade and data.” India, like many others, is still in the process of preparing a framework for its data protection and e-commerce laws, he said.  “Moreover, the existing regulations on which DFFT is sought to be premised, such as uninhibited cross-border flow of data, are grossly inadequate to address our concerns on data access. This could further aggravate the digital divide,” he said.

Though the department for promotion of industry and internal trade (DPIIT) has somewhat softened its stance on mandatory local data storage, as proposed in an earlier draft e-commerce policy, its new draft policy still suggests a comprehensive, periodic audit of the storage locations of players such as Amazon, Flipkart and those that store Indian users’ data abroad, sources earlier told FE.

These players will have to build in adequate safeguards at the specified storage locations as well to ensure privacy of the user isn’t compromised. Also, the new draft policy suggests restrictions on cross-border flow of sensitive information, such as those relating to defence or medical records, etc, without formal authorisation. The latest draft policy is still being deliberated upon and is not in the public domain yet.

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