India rejects RCEP e-commerce chapter

News:India has rejected the e-commerce chapter of the Regional Comprehensive Economic Partnership (RCEP) agreement.

Facts:

What did the e-commerce chapter contains?

• The e-commerce chapter contains clauses which if India had agreed to them,would have prevented India from implementing data localisation rules on companies doing business in India.
• Instead, India has proposed that participating country can locate the computing facilities inside the country if it is meant to protect its essential security interests and national interests.
• However,India’s alternate proposal has been opposed by the 14 members of the 16-country RCEP countries.

What has India agreed to?

• India is learnt to have agreed to financial transfer chapter in the agreement.
• The chapter says that the financial services companies will be allowed to move and store data of Indians abroad. 
• This proposal is crucial as the Reserve Bank of India’s (RBI) in its April 2018 notification mandated all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India.

Additional information:

Data localisation:

• Data localisation is the act of storing data on any device physically present within the borders of a country.
• Localisation mandates that companies collecting critical data about consumers must store and process them within the borders of the country.
• The main intent behind data localisation is to protect the personal and financial information of the country’s citizens and residents from foreign surveillance and give local governments and regulators the jurisdiction to call for the data when required.
• The data localisation is also essential to national security.Storing of data locally is expected to help law-enforcement agencies to access information that is needed for the detection of a crime or to gather evidence.