The era of data-globalism is over. The absolute free flow of data across borders and national jurisdictions is no longer viable. Whether for reasons of security or economics, the slow slide towards collective protectionism in the United States and Europe is unmistakable. In China, it is absolute. Where then does this leave India, a country that opened its doors and its oversized data market to the rest of the world, including Chinese firms and investors, but who’s leaders and technology champions are more than aggrieved?
This data protectionism, to an extent, is a result of the changing nature of geopolitics, marked by the need for greater localisation rather than globalisation, and the near-complete breakdown of trust in international relations. In the United States, cyberspace tsars evangelise about the creation of what they call the Internet Freedom League: ‘a coalition that would unite Internet users, companies and countries around democratic values.’ For those states deemed to be undemocratic, the message is clear: ‘follow the rules, or get cut off.’
France and Germany, the leading economic powerhouses in Europe, support the creation of a European Cloud Initiative. Put simply, they are striving to create a Digital Single Market in Europe. This, their political leaders argue, allows them and other European Union states to protect their domestic markets from overdependence on American technology companies (like Amazon Web Services). Essentially, this is about recovering Europe’s ‘data sovereignty’.
Data localisation equals higher growth
India is the world’s largest open data market. Around 1.1 billion Indians are expected to use smartphones by 2024. Data usage per phone is expected to rise from 9.8 GB per month at present to 18 GB in the next five years. These figures represent the highest smartphone data usage in the world. It is one of several reasons why data is considered a national treasure. Yet, Indian organisations figure nowhere among the top data-based technology companies in the world. To bridge this delta, between supplying data to turning it into tradable capital, the Narendra Modi government fervently claims that India will no longer ‘compromise on data sovereignty.’
The equation is fairly simple: more data located and harnessed in India equals higher levels of economic growth. How exactly this conversion takes place is another matter altogether. To be sure, academic studies show that restrictions to the global flow of data adversely affect economic growth of countries. This notwithstanding, the 0.5 per cent drop in India’s GDP growth rate in the second quarter of this financial year will only further legitimise the argument for stronger protections of the country’s data.
The annoyance of India’s political leaders is understandable. First, ‘Big Tech’ gets bigger each passing year, partially because of the large amounts of data that they can access in India. Second, Indian data, stored in servers owned or licensed by non-Indian companies, are not easily accessible to Indian officials and agencies. This is true even in the case of data stored within India.
The frustration is multiplied by the fact that India’s domestic capabilities, whether it is the ability to build Indian data centres or compete in the global data market, are nowhere close to realising their potential. A combination of these reasons could push India into a closed marketspace. Off the record, officials and captains of India’s start-up ecosystem openly endorse the ‘China model’, that is, closing the gates to Indian data or making it highly costly to access it. The draft Personal Data Protection Bill (PDPB), 2018 outlines various options for localisation of different categories of data. We will get a clear idea of Modi government’s chosen path only when the bill is tabled in Parliament.
It would be tempting to stumble upon nativist pathways and perhaps replace a growth model fashioned around market incentives with one shaped by instinct. India is not China. Big tech is already here, dotted across the suburbs of Bengaluru and a range of other and growing tech-friendly cities. This does not mean that data should not at least be partially gated – it should be. It means that as a nation that has grown as a result of trade (accounting for a sizeable portion of India’s $2.7 trillion GDP) and quasi-open economic borders, and as one that has exercised exceptionalism in all matters of international trade and politics – there is a genuine opportunity to craft a unique advance.
Some categories of data are going to have to remain in India, as indicated in the PDPB. Demands can be made on both big and growing technology firms to provide greater access to some of their data sets. These could be for the expressed purposes of aiding projects dedicated to socio-economic transformations in health, education, urbanisation and other such sectors. Such an approach that calibrates the usage of Indian data without losing sight of the need for the international, would, in essence, be glocal.
Rather than shun the G20 or other multilateral groupings that are currently working to construct new data sharing architectures, India should take the lead, or at least provide alternatives between the richer nations’ (such as Japan) advocacy for the free flow of data and the temptation to lift the data draw-bridge closed. India could well leverage its large data market to extract concessions from other G20 nations to structure a data transfer agreement that sets common standards and definitions, which still suits its interests.
Further, if India’s leaders remain inspired by the promise of tomorrow and can find a crack in the undertested dogmas of data sovereignty, the country could even moot its self-styled and more inclusive transnational data league motivated by its own needs. If indeed, India is to play the role of what Foreign Minister S. Jaishankar calls ‘a leading power’, why not do so in the future of data, where we have what the world wants (data), and where we can still get what we need (capital, markets, knowledge transfer, and harnessed and annotated data)?
This article is part of a series examining The Future of Data in partnership with Carnegie India leading up to its Global Technology Summit 2019 in Bengaluru from 4-6 December 2019. More details about the summit are available here.
The author is the director, Carnegie India. Views are personal.