Recently,the government has consulted with the industry representatives to understand the potential need for government-led ‘cloud economic zones’.
Cloud economic zone are the geographical areas identified for the creation of data storage centres.
However, Some industry representatives have expressed security concerns with placing sensitive data in restricted economic zones as this will allow for single attacks to threaten the high-risk areas.
In April 2018,Reserve Bank of India(RBI) had asked payment firms to ensure their data are stored exclusively on local server in India.Further, the draft e-commerce policy has also recommended strict data localisation.
Indian government is also under increasing pressure from the US government and foreign industry players not to restrict data storage.
At the G20 summit in Osaka,Indian Prime Minister did not sign onto a declaration of data free flow with trust proposed by Japan and heavily championed by the US.India has also refused to join negotiations about e-commerce at the World Trade Organization.