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India, the biggest open data market, has a chance to lead the world on data arbitration

No other country enjoys the structural advantages that India possesses. So, it can create a multilateral platform for inter-governmental data mediation.

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Chinese vice-president Wang Qishan recently said that the “post-war international order” has “come to collapse”.

The vice-president was speaking at the World Peace Forum, organised by Tsinghua University in Beijing, on 8 July. His message to the world was simple – it’s time to “jointly build an international order that is fair and equitable”. Others at the forum echoed his sentiments.

Whether it was the former Belgian Prime Minister and president of the European Council, Herman Van Rompuy, or the former Russian minister of foreign affairs, Igor Ivanov, leaders underlined that the “multilateral order is under threat”. Ivanov went as far as suggesting that “the old world order” was “already over”. Little, however, was said about how a new world order could be created. What this architecture would look like was a question that went largely unaddressed.

There is no doubt that current order is under attack, however, it’s anything but ‘over’.

An empirical examination of the way in which the world works makes it clear that the post-Second World War order continues to shape global politics. The Bretton Woods conference in New Hampshire, in July 1944, led to the creation of the International Monetary Fund, which still stands. Indeed, this July marks the 75th anniversary of the conference. The World Trade Organization, which India joined in 1995, continues to arbitrate differences in trading practices. There are innumerable examples of ‘old’ multilateralism in action.

Yet, what is also clear is that there is an urgent need to rethink the way in which the world considers new challenges. The future of data is one such matter. Whether it is the issue of privacy on the one hand, or that of safe and secure 5G technologies on the other, data adjudication is likely to define and shape inter-governmental relations.

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There is a genuine opportunity for India to lead a new multilateral structure for data arbitration. No other country in the world, currently, enjoys the structural advantages that India possesses. India is the largest open data-market in the world. Although the Chinese vice-president made a strong case for an “open road economy of higher standards” at the World Peace Forum, in reality, China is a closed economy when it comes to technology and data. To put it parochially, it does not have the required ‘street credit’ to lead multilaterally.

India, however, has long attracted ‘big’ tech. Amazon, Google, Facebook, and others flocked to its enormous market. The extent to which the Indian market will remain open and free is equally under examination, making the need for data arbitration a top priority.

For these reasons, there is an imperative need to create a multilateral platform for inter-governmental data mediation.

Such a mechanism could be called the D20, or the Data 20 – a collection of the 20 states most invested in the future of data. The exact rationale for a D20 is as follows.

First, it concerns the requirement for data access. Whether it is for law enforcement, surveillance, detecting online radicalisation, or the prevention of terrorist attacks, accessing data is one reason that has led countries like India to seriously consider ‘data localisation.’ This essentially means storing data physically within India.

Currently, most large firms store data outside India’s borders. Whether or not storing data in India will necessarily lead to access needs examination, but the increasingly popular view suggests that by keeping data in India, the question of access will be automatically solved. In the end, whether India localises or not, data-led conflicts between big business and the Indian state is bound to affect government-to-government relations.

The Indian government uses tried, tested and slow-working mechanisms – known as Mutual Legal Assistance Treaties (MLAT) – to request the access of data (of its own citizens) from private entities such as Facebook or Google. These are, according to experts, technologically outdated mechanisms to deal with imminent threats.

Also read: Indian worker may lose 11% of monthly salary if data localisation becomes law, study says

Alternatively, and as far as data stored in the United States is concerned, access could be provided by entering into an executive agreement under the US’ CLOUD Act (2018). It is unlikely that India will consider this, and for good reason. The Act requires the US attorney general to determine whether a requesting country meets US standards on privacy and other basic rights before data can be shared with it. While the CLOUD Act framework is potentially faster than the MLAT route to access data, Indian negotiators may feel loath to subject their country’s legal framework to another’s judgment in order to protect their own security. Pressing the point on the CLOUD Act may, in fact, result in the opposite outcome – pushing India further down the road towards ‘hard’ localisation. This could well lead to the Balkanisation of the internet.

The key questions then are: Can data access be achieved without ‘hard’ localisation? Is it desirable to combine the issue of localisation with data access, or are India’s objectives better served by decoupling the two? The answers to these questions require the right kind of multilateral forums for debate. The D20, led by India, can achieve this.

Second, fast-changing geo-politics have once again highlighted the need for data sovereignty. The United States’ less-than-predictable international advance has a definitive impact on India. This factor cannot and should not be underestimated. Take, for instance, the recent case of the SWIFT financial data service and Iran. Created in 1973, the SWIFT is a standard that has been adopted by over 200 countries. In 2018, and under US pressure, Iran was cut-off from the standard. This means that Iran stopped receiving financial messages and data through the world wide banking system, making it hard to transact cross-border business. While it is unlikely that the US will impose such costs on an ‘ally’ like India, little can be left to chance. By weaponising data globally, the US administration has done little more than reinforced the need for the sovereign control of data in India.

There is an exigent need to sit across a table and create new standards for data arbitration. For India, it is a unique opportunity to lead and create a structure such as or similar to the D20, and to institutionally connect with like-minded actors on the future of data. It’s also a chance to realise one of the 10 ‘noble commitments’ mooted by Prime Minister Narendra Modi at a BRICS meeting in 2017: “creating a digital world by bridging the digital divide within and outside our economies”.

Rudra Chaudhuri is the Director of Carnegie India and Anirudh Burman is a Senior Research Analyst at Carnegie India. Views are personal.

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