Indian Workers May Lose 11% Monthly Salary Over Data Localisation

If data localisation becomes a law, an average Indian worker may lose 11 percent of his/her monthly salary.

(Photo: iStockphoto)

According to a study by European Centre for International Political Economy, if proposed data protection laws come into effect, an average Indian worker may be losing out on 11 percent of his/her monthly salary, The Print reported.

The Brussels-based independent policy research think tank found that a welfare loss between $3.1 billion to $14.5 billion could be a result of the data localisation provisions of the data protection bill.

Data localisation states that the data that is collected on the Indian territory should be stored with the country and data notified as critical personal data by the government can only be processed in India.

Going by the data protection bill, a copy of personal data must also be stored in India, The Print reported.

According to the study reported by The Print, enforced data localisation could affect India’s projected growth by about 20 percent and investments, exports and long-term growth may drop by 1.9 percent.

‘Data Localisation Will Augment India’s IT Sector’

While reacting to the findings, (retd) Justice B.N. Srikrishna, former Supreme Court judge, said “there is not much merit in these arguments. According to The Print, he also said that “every new law increases the business cost.”

According to Srikrishna, data localisation will augment India’s IT sector.

“(Developed) countries were the first kids on the block. And they are sitting on large reserves of data. I don’t see why we (India) should be bereft of data, why do our boys and girls have to go and sit in California to work on data,”

Justice BN Srikrishna (retd), former Supreme Court judge

Should Data Be Localised?

After the Puttaswamy case on Aadhaar and right to privacy, need for a separate law in order to protect personal data came to light.

According to The Print, members of the drafting committee like Rama Vedashree, head of DSCI, showed dissent against the bill’s provisions for data localisation.

However, various foreign companies have spoken against the proposed data localisation provisions. According to The Print, Apple, IBM, Microsoft, international software industry body BSA – The Software Alliance, and even the Data Security Council of India (DSCI), an initiative of Indian IT trade association NASSCOM, have all spoken out against it.

These companies feel that the data localisation would limit innovation and quality of tech services. They also expressed concern over the negative economic impact it would have, The Print reported.

A report titled ‘Data Localisation In A Globalised World: An Indian Perspective’, by The Dialogue, a public policy think tank, says data protection and localisation laws may end up hurting India’s rise up the World Bank’s Ease of Doing Business rankings.

“The narrative that localisation enhances growth is likely mistaken,” it said.

According to The Print, Srikrishna said the bill will be debated during the winter session of Parliament. A select committee may deliberate on the bill, in which case it won’t become a law anytime soon.

(With inputs from The Print.)