With the RBI standing firm on its data localisation stance, the US-India Business Council (USIBC) Tuesday cautioned that policies restricting flow of data can act as “barriers” to expansion of services in India, impacting not only consumers but also growth of Indian payments market.
The statement comes just a day after the expiry of RBI-imposed deadline on data localisation for payments companies operating in India.
Nearly 80 per cent players in the payment industry, including Paytm and WhatsApp, have complied with the RBI norms for storage of payments-related data, but some debit/credit players are yet to fall in line, having reportedly sought more time. “USIBC seeks to continue working with Indian policy makers to address the concerns behind the data localisation policies and deepen the ability of American companies to serve the growing needs of Indian consumers in the payments markets,” Nisha Biswal, president of US-India Business Council at US Chamber of Commerce, said in a statement.
Biswal said USIBC members are willing to work with the Indian government to identify “the best path forward” for data storage issues with regard to payment companies operating in India. India must pursue policies to ensure it remains a hub for global services and brings ‘best-in-class’ technology and operations for maturing payment needs of Indian consumers, the statement said.
As a leading economy in the international stage, India’s policies must reflect increasingly interconnected relationships between Indian consumers and their service providers have across the global marketplace, the statement added. “Data policies restricting the flow of data can serve as barriers to continued growth and expansion of services in the Indian markets and affect not only the Indian consumer but also the growth of the Indian payments market as a whole,” the statement warned.
The increasing complexity of the Indian markets “necessitates” a collaborative relationship with key stakeholders to evolve policies that leverage existing benefits and propel India’s economic growth forward, Biswal pointed out. “USIBC understands the vision of a sound payments infrastructure in India is a long-term objective requiring the on-going commitment of both stakeholders and policymakers to enact the most effective reforms,” the statement added.
The RBI, in April, had issued a circular instructing all payments system providers in the country to ensure that data relating to systems operated by them is stored only in India and had set a deadline of October 15.
The central bank’s data localisation policy had elicited mixed response from the payment services industry. While some of the prominent domestic payment companies like Paytm and PhonePe have been supportive of the dictum, global players like Google (that offers Google Pay) had argued for free movement of data. Data localisation refers to the process of storing data within the borders of a particular country where the data was generated. – Financial Express