Cloud storage data to be within the country says the government panel

NEW DELHI: A panel which was working on the government's cloud computing policy wants the data that was generated in India to be stored within the country, according to its draft report seen by Reuters, a proposal that would deal a blow to global technology giants such as Amazon and Microsoft who offer such services.

It could not only raise their costs because they will need to ramp up the number and size of data storage centres in India, where power costs remain high, but at least some of those increases are likely to be passed onto customers who include everyone from small start-ups to large Indian corporations.

The policy will be the latest in a series of proposals that seek to spur data localisation in India, as the government finalizes an overarching data protection law. Local data storage requirements for digital payments and e-commerce sectors are also being planned.

The authorities want the information stored locally so that they can more easily get access to it when conducting investigations.

India's push for localisation comes at a time of heightened global scrutiny of how companies store user data. In July, India said its federal police had begun probing Cambridge Analytica misuse of Facebook user data, which New Delhi suspects included information on

Cloud computing refers to the provision of software, storage and other services to customers from remote data centres. It allows companies to use programs at lower operational costs as programs and data are not stored at the customer's own data centres, or on their desktops.

Industry executives said many Indian businesses store their data on cloud servers located outside the country and a localisation mandate could force them to migrate data to India. "Data localization will increase costs for public cloud companies as they might need to expand data centre capacity to fit customer data currently hosted outside India," said Santanu Patro, a research director with research and advisory firm Gartner in India. He said they could pass on the increase to customers.

The panel's draft recommendations said that India must consider the importance of securing "data sovereignty, especially in the context of cross-border data flows".

"Indian legal and policy frameworks must focus on ensuring that data generated from India can be utilised for the benefit of Indian citizens, governments and private players," it said.

An executive at a global technology company offering cloud services in India described the policy's recommendations as "protectionist".

"It seems we've turned the clock back on globalisation," the executive said.

Infrastructure challenges

The Indian public cloud services market is set to more than double to $7 billion by 2022, the draft report said. Enterprise spending on data centre infrastructure software will rise 10 percent to $3.6 billion in 2018, research firm Gartner estimates.

The panel also plans to recommend development of a "national cloud strategy" that could bring cloud service providers under a single regulatory and policy framework.

The Indian government's data localisation push has already unnerved US companies who fear it will drive up costs and unsettle businesses. A government panel last week floated a bill that proposes all critical personal data should be processed within India.