NEW DELHI • A panel working on the Indian government's cloud computing policy wants data generated in India to be stored within the country, according to its draft report, a proposal that could deal a blow to global technology giants such as Amazon and Microsoft who offer such services.
It could not only raise their costs because they will need to ramp up the number and size of data storage centres in India, where power costs remain high, but at least some of those increases are likely to be passed on to customers who include everyone from small start-ups to large Indian corporations.
The policy will be the latest in a series of proposals that seek to spur data localisation in India, as the government finalises an overarching data protection law. Local data storage requirements for digital payments and e-commerce sectors are also being planned.
The authorities want the information stored locally so that they can more easily get access to it when conducting investigations.
India's push for localisation comes at a time of heightened global scrutiny of how companies store user data. Last month, India said its federal police had begun probing Cambridge Analytica's misuse of Facebook user data, which New Delhi suspects included information on Indian users.
The draft report of the cloud policy panel, which is headed by the co-founder of Indian tech giant Infosys, Mr Kris Gopalakrishnan, said a "forward looking" data protection regime was needed as India's IT laws framework was "not sufficient" for cloud computing.
"We recommend localisation of cloud data and any data that is stored about Indian entities or data generated in India," it said, adding this data "must be available for investigative agencies and national security agencies".
Mr Gopalakrishnan declined to comment on the draft report, but said he hopes to submit it to the Information Technology Ministry before month-end, or at least by Sept 15. A spokesman for the ministry said the department would review the report once it is submitted but will not comment before that.
Cloud computing refers to the provision of software, storage and other services to customers from remote data centres. It allows companies to use programs at lower operational costs as programs and data are not stored at the customer's own data centres, or on their desktops.
Industry executives said many Indian businesses store their data on cloud servers located overseas and a localisation mandate could force them to migrate data to India.
"Data localisation will increase costs for public cloud companies as they might need to expand data centre capacity to fit customer data currently hosted outside India," said Mr Santanu Patro, a research director with research and advisory firm Gartner in India.
The panel's draft recommendations said that India must consider the importance of securing "data sovereignty, especially in the context of cross-border data flows".
"Indian legal and policy frameworks must focus on ensuring that data generated from India can be utilised for the benefit of Indian citizens, governments and private players," it said.
An executive at a global technology company offering cloud services in India described the recommendations as "protectionist".
"It seems we've turned the clock back on globalisation."