Restricting cross-border data flow will hurt economy: Internet companies

Asia Internet Coalition says draft e-commerce policy must not classify data as a community resource.

An industry group representing Facebook, Airbnb, Google, Amazon and Twitter has requested the government to take a "thoughtful approach" about cross-border data flow, saying restrictions will hurt India's digital economy.

The Asia Internet Coalition (AIC) made its recommendation to the Department for Promotion of Industry and Internal Trade after reports that Commerce Minister Piyush Goyal has asked the issue of data localisation to be kept out of the ambit of the draft e-commerce policy, and let the Information Technology ministry handle the issue under a proposed law.

"While we commend the removal of data localisation from the e-commerce policy draft this week, we strongly urge policy makers to take a similarly thoughtful approach on cross-border data flows and from overreaching in key areas including consumer protection and intermediary liability," said Jeff Paine, Managing Director, AIC.

The proposed law restricts cross-border data flow, akin to guidelines issued by the Reserve Bank of India for payment companies. Last week, Goyal asked companies to submit their concerns pertaining to the draft e-commerce policy of the government within 10 days. 

AIC, in a detailed submission to the department, has addressed several points of concern with the proposed e-commerce policy in its current form. 

The current policy states that data about a group of Indian individuals be treated as a national asset. AIC said that this was a misclassification.

"By misclassifying data as a community resource, the Draft Policy is interfering with the process of consensual transfer of data from individuals to corporations, and creating a route for corporations to gather data directly from the government," it said. 

AIC said restricting cross-border data flows would harm the growth prospects of the Indian digital economy by limiting access to global technology, collaborations, and economies of scale.

It has also opposed the intellectual property rights proposals, incorporation restrictions and overregulation of taxes on e-commerce firms. 

"It should respect the autonomy of individuals and businesses and not seek to over-regulate and unnecessarily interfere in the free market by dictating how, when, where and with whom individuals can share their data, where and how businesses should compete, and in general prescribing micro-level changes that may be difficult to operationalise across all services," AIC said.