INSUBCONTINENT EXCLUSIVE:
Data sovereignty is on the rise across the world
Laws and regulations increasingly require that citizen data be stored in local data centers, and often restricts movement of that data
outside of a country borders
The European Union GDPR policy is one example, although it relatively porous
China relatively new cloud computing law is much more strict, and forced Apple to turn over its Chinese-citizen iCloud data to local
providers and Amazon to sell off data center assets in the country.
Now, it appears that India will join this policy movement
According to Aditya Kalra in Reuters, an influential cloud policy panel has recommended that India mandate data localization in the country,
for investigative and national security reasons, in a draft report set to be released later this year
That panel is headed by well-known local entrepreneur Kris Gopalakrishnan, who founded Infosys, the IT giant.
That report would match other
policy statements from the Indian political establishment in recent months
The government draft National Digital Communications Policy this year said that data sovereignty is a top mission for the country
The report called for the government by 2022 to &Establish a comprehensive data protection regime for digital communications that safeguards
the privacy, autonomy and choice of individuals and facilitates India effective participation in the global digital economy.
It that last
line that is increasingly the objective of governments around the world
While privacy and security are certainly top priorities, governments now recognize that the economics of data are going to be crucial for
future innovation and growth
Maintaining local control of data — through whatever means necessary — ensures that cloud providers and other services have to spend
locally, even in a global digital economy.
India is both a crucial and an ironic manifestation of this pattern
It is crucial because of the size of its economy: public cloud revenues in the country are expected to hit $2.5 billion this year, according
to Gartner estimates, an annual growth rate of 37.5%
It is ironic because much of the historical success of India IT industry has been its ability to offer offshoring and data IT services
across borders.
Indian Prime Minister Narendra Modi has made development and rapid economic growth a top priority of his government
(Krisztian Bocsi/Bloomberg via Getty Images)
India is certainly no stranger to localization demands
In areas as diverse as education and ecommerce, the country maintains strict rules around local ownership and investment
While those rules have been opening up slowly since the 1990s, the explosion of interest in cloud computing has made the gap in regulations
around cloud much more apparent.
If the draft report and its various recommendations become law in India, it would have significant effects
on public cloud providers like Microsoft, Google, Amazon, and Alibaba, all of whom have cloud operations in the country
In order to comply with the regulations, they would almost certainly have to expend significant resources to build additional data centers
locally, and also enforce data governance mechanisms to ensure that data didn''t flow from a domestic to a foreign data center accidentally
or programmatically.
I&ve written before that these data sovereignty regulations ultimately benefit the largest service providers, since
they&re the only ones with the scale to be able to competently handle the thicket of constantly changing regulations that govern this
space.
In the India case though, the expense may well be warranted
Given the phenomenal growth of the Indian cloud IT sector, it highly likely that the major cloud providers are already planning a massive
expansion to handle the increasing storage and computing loads required by local customers
Depending on how simple the regulations are written, there may well be limited cost to the rules.
One question will involve what level of
foreign ownership will be allowed for public cloud providers
Given that several foreign companies already exist in the marketplace, it might be hard to completely eliminate them entirely in favor of
Yet, the large providers will have their work cut out for them to ensure the market stays open to all.
The real costs though would be borne
by other companies, such as startups who rely on customer datasets to power artificial intelligence
Can Indian datasets be used to train an AI model that is used globally Will the economics be required to stay local, or will the regulations
be robust enough to handle global startup innovation It would be a shame if the very law designed to encourage growth in the IT sector was
the one that put a dampener on it.
India chief objective is to ensure that Indian data benefits Indian citizens
That a laudable goal on the surface, but deeply complicated when it comes time to write these sorts of regulations
Ultimately, consumers should have the right to park their data wherever they want — with a local provider or a foreign one
Data portability should be key to data sovereignty, since it is consumers who will drive innovation through their demand for best-in-class
