Challenges with cross border data

What is the issue?

In the present digital era,  the governance of cross-border data is a major challenge for countries.

What is cross border data?

• The increased digitalization has made data an input to commerce, and made data of one nation to travel to another.
• It is a simple fact that international trade involving consumers cannot take place without collecting and sending personal data across borders.
• It makes industries streamline their business practices and increase efficiency.

What are the global dilemmas in addressing this?

• Governance of cross-border data through trade agreements is a major challenge for countries, since it is difficult to regulate.
• There are differences among countries in outlooks and approaches to data security and its commercial use.
• Many countries consider fundamental rights of citizens, including the right to privacy of data, superior to trade rights.
• It is difficult to determine the ‘optimal’ level of data protection content in trade agreements that would simultaneously satisfy both protection and innovation.

What are the challenges for India?

• India struggles to discover regulations that would facilitate its economic growth while ensuring data flow doesn’t affect citizens' privacy.
• Creating effective domestic regulations is a big challenge.
• The choice of the right policy mix is difficult as they may overlap with other complex trade issues such as IPR.
• Foreign investments in Make-in-India industries would be influenced by data regulations.
• Data regulations are also critical in terms of the security risks they involve, particularly financial risks arising from lapses in cyber security and data theft.

What can be done?

• India must be prepared to accept that data regulations and digital trade rules, which it would negotiate in future.
• India needs to move towards domestic regulations on digital trade, ensuring sufficient security of private data.
• India’s domestic regulations on cross-border flow of data must also reflect contemporaneity.
• Data rules and digital trade governance deserve much greater attention from India than it has got till now.

Source: Financial Express