India urged to soften data localization stance by U.S. senators

NEW DELHI - Two US senators have called on Indian Prime Minister Narendra Modi to soften India's stance on data localisation, warning that measures requiring it represent "key trade barriers" between the two nations.
In a letter to Modi dated Friday and seen by Reuters, US Senators John Cornyn and Mark Warner - co-chairmen of the Senate's India caucus - urged India to instead adopt a "light touch" regulatory framework that would allow data to flow freely across borders.
The letter comes as relations between Washington and New Delhi are strained over multiple issues, including an Indo-Russian defense contract, Indian tariffs on electronics and other items, and India's push to purchase oil from Iran despite upcoming US sanctions.
Global tech companies including Mastercard, Visa and American Express have been lobbying India's finance ministry and the Reserve Bank of India to relax proposed guidelines that mandate all payment data on domestic transactions in India be stored inside the country by October 15.
The letter is most likely a last-ditch effort after the RBI told officials at top payment companies this week that the central bank would implement, in full, its data localisation directive without extending the deadline or allowing data to be stored offshore as well as locally.
"We see this as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership," the U.S. senators said in its letter.
Modi's office did not immediately respond to an email seeking comment.