India’s Role in Global Cyber Policy Formulation

The article by Arindrajit Basu was published in Lawfare on November 7, 2019. The article was reviewed and edited by Elonnai Hickok and Justin Sherman.

The onslaught of recent developments demonstrates how India can shape cyber policy debates. Among emerging economies, India is uniquely positioned to exercise leverage over multinational tech companies due to its sheer population size, combined with a rapid surge in users coming online and the country’s large gross domestic product. India occupies a key seat at the data governance table alongside other players like the EU, China, Russia and the United States — a position the country should use to promote its interests and those of other similarly placed emerging economies.

For many years, the Indian population has served as an economic resource for foreign, largely U.S.-based tech giants. Now, however, India is moving toward a regulatory strategy that reduces the autonomy of these companies in order to pivot away from a system that recently has been termed “data colonialism”—in which Western technologies use data-driven revenue bolstered by information extracted from consumers in the Global South to consolidate their global market power. The policy thinking underpinning India’s new grand vision still has some gaps, however.

Data Localization

Starting with a circular from the Reserve Bank of India in April 2018, the Indian government has introduced a range of policy instruments mandating “data localization”—that is, requiring that certain kinds of data must be stored in servers located physically within India. A snapshot of these policies is summarized in the table below.

(Source here. Design credit: Saumyaa Naidu)

While there are a number of reasons for this maneuver, two in particular are in line with India’s broader vision of data sovereignty—broadly defined as the sovereign right of nations to govern data within their territory and/or jurisdiction in order to support their national interest for the welfare of their citizens. First, there is an incentive to keep data within India’s jurisdiction because of the cumbersome process through which Indian law enforcement agencies must go during criminal investigations in order to access data stored in the U.S. Second, data localization undercuts the extractive economic models used by U.S. companies operating in India by which the data generated by Indian citizens is collected in India, stored in data centers located largely in the U.S., and processed and analyzed to derive commercially valuable insights.

Both foreign players and smaller Indian private-sector actors were against this move. A study on the issue that I co-authored earlier this year with Elonnai Hickok and Aditya Chawla found that one of the reasons for this resistance involved the high costs of setting up the data centers that are needed to comply with the requirement. President Trump echoed this sentiment when he explicitly opposed data localization during a meeting with Prime Minister Narendra Modi on the sidelines of the G-20 in June 2019.

At the same time, large Indian players such as Reliance and Paytm and Chinese companies like AliBaba and Xilink were in favor of localization—possibly because these companies could absorb the costs of setting up storage facilities while benefiting from the fixed costs imposed on foreign competition. In fact, some companies, such as AliBaba, have already set up storage facilities in India.

As my co-authors and I noted, data localization comes with various risks, both diplomatically and politically. So far, the issue has caused friction in U.S.-India trade relations. For example, before Secretary of State Mike Pompeo's trip to New Delhi in June, the Trump administration reportedly contemplated limiting H-1B visas for any country that implements a localization requirement. Further, on his trips to New Delhi, Commerce Secretary Wilbur Ross has regularly argued that data localization restrictions are a barrier to U.S. companies and stressed the need to eliminate such barriers. Further, data localization poses several technical challenges as well as security risks. Mirroring data across multiple locations, as India’s Draft Personal Data Protection Bill mandates, increases the number of physical data centers that need to be protected and thereby the number of vulnerable points that malicious actors can attack.

Recently, the Indian media have reported disagreements between policymakers over data localization, along with speculation that the data storage requirement in the Draft Personal Data Protection Bill could be limited only to critical data—a term not defined in the bill itself—or be left to sectoral regulators, officials from individual government departments.

Our paper recommended a dual approach. In our view, data localization policy should include mandatory localization for critical sectors such as defense or payments data, while also adopting “conditional” localization for all other data. Under conditional localization, data should only be transferred to countries that (a) agree to share the personal data of Indian citizens with law enforcement authorities based on Indian criminal procedure laws (examples of such a mechanism may be an executive data-sharing agreement under the CLOUD Act) and (b) have equivalent privacy and security safeguards. This approach would be in line with India’s overarching vision of data sovereignty and the goal of standing up to the hegemony of big tech and of U.S. internet regulations, while avoiding undue collateral damage to India’s global alliances.

Intermediary Liability

In line with the goal of ensuring that big tech is answerable to the rule of law, the Indian government has also sought to regulate the adverse social impacts of some speech hosted by platforms. Rule 3(9) of the Draft of the Information Technology Intermediaries Guidelines (Amendment) Rules, 2018, released by the Ministry of Electronics and Information Technology in December 2019, takes up the interventionist mission of laws like the NetzDg in Germany. The regulation would mandate that platforms use “automated tools or appropriate mechanisms, with appropriate controls, for proactively identifying and removing or disabling public access to unlawful information or content.” These regulations have prompted concerns from both the private sector and civil society groups that claim the proposal fails to address constitutional concerns about algorithmic discrimination, excessive censorship and inappropriate delegation of legislative powers under Indian law. Further, some observers object that the guidelines adopt a “one-size-fits-all” approach to classifying intermediaries that does not differentiate between platforms that thrive on end-to-end encryption like WhatsApp and public platforms like Facebook.

In many ways, these guidelines—likely to be notified (as an amendment to the Information Technology Act) as early as January 2020—put the cart before the horse. Before devising regulatory models appropriate for India’s geographic scale and population, it is first necessary to conduct empirical research about the vectors through which misinformation spreads in India and how misinformation impacts different social, economic and linguistic communities, along with pilot programs for potential solutions to the misinformation problem. And it is imperative that these measures be brought in line with constitutional requirements.

Community Data and “Data as a Public Good”

Another important question involves the precise meaning of “data” itself—an issue on which various policy documents have failed to deliver a consistent stance.

The first conceptualization of “community data” appears in both the Srikrishna Committee Report that accompanied the Draft Personal Data Protection Bill in 2018 and the draft e-commerce policy. However, neither policy provides clarity on the concept of data.

When defining community data, the Srikrishna Report endorses a collective protection of privacy as protecting an identifiable community that has contributed to community data. According to the Srikrishna Report, receiving collective protection requires the fulfillment of three key aspects. First, the data belong to an identifiable community. Second, the individuals in the community consent to being a part of the community. And third, the community as a whole consents to its data being treated as community data.

The draft e-commerce policy reconceptualizes the notion of community data as “societal commons” or a “national resource,” where the undefined ‘community” has rights to access data but the government has overriding control to utilize the data for welfare purposes. Unlike the Srikrishna Report, the draft e-commerce policy does not outline the key aspects of community data. This approach fails to demarcate a clear line between personal and nonpersonal data or to specify any practical guidelines or restrictions on how the government can use community data. For this reason, implementation of this policy could pose a threat to the right to privacy that the Indian Supreme Court recognized as a fundamental right in 2017.

The second idea is that of “data as a public good.” This is described in Chapter 4 of the 2019 Economic Survey Report—a document published by the Ministry of Finance along with the Annual Financial Budget. The report explicitly states that any data governance framework needs to be deferential to privacy norms and the soon-to-be-enacted privacy law. The report further states that “personal data” of an individual in the custody of a government is a “public good” once the datasets are anonymized.

However, the report’s recommendation of setting up a government database that links several individual databases together leads to the “triangulation” problem, in which individuals can be identified by matching different datasets together. The report further suggests that the same data can be sold to private firms (though it is unclear whether this includes foreign or domestic firms). This directly contradicts the characterization of a “public good”—which, by definition, must be nonexcludable and nonrivalrous—and is also at odds with the government’s vision of reining in big tech. The government has set up an expert committee to look into the scope of nonpersonal data, and the results of the committee’s deliberations are likely to influence the shape that India’s data governance framework takes across multiple policy instruments.

There is obviously a need to reassess and reevaluate the range of governance efforts and gambits that have emerged in the past year. With domestic cyber policy formulation pivots reaching a crescendo, we must consider how domestic cyber policy efforts can influence India’s approach to global debates in this space.

India’s Contribution to Global Cyber Policy Debates

As the largest democracy in the world, India is undoubtedly a key “digital decider” in shaping the future of the internet. Multilateral cyber policy formulation efforts remain polarized. The U.S. and its European allies continue to advocate for a free, rules-based conception of cyberspace with limited governmental interference. China and Russia, along with their Shanghai Cooperation Organisation allies, are pushing for a tightly regulated internet in which each state has the right to manage and define its “network frontiers” through domestic regulation free from external interference. To some degree, India is already influencing debate over the internet through its various domestic cyber policy movements. However, its participation in international debates has been lacking the vigor or coherence needed to clearly articulate India’s national interests and take up a global leadership role.

In shaping its contributions to global cyber policy formulation, India should focus its efforts on three key places: (a) internet governance forums that deliberate the governance of the technical architecture of the internet such as domain names, (b) cyber norms formulation processes that seek to establish norms to foster responsible behavior in cyberspace by states and nonstate actors in cyberspace, and (3) global debates on trade and cross-border data flows that seek to conceptualize the future of global digital trade relationships. As I discuss below, there are key divisions in Indian policy in each of these forums. To realize its grand vision in the digital sphere, India needs to do much more to make its presence felt.

Internet Governance Forums

India’s stance on a variety of issues at internet governance forums has been inconsistent, switching repeatedly between multilateral and multistakeholder visions for internet governance. A core reason for this uncertainty is the participation of multiple Indian government ministries, which often disagree with each other. At global internet governance forums, India has been represented either by the Department of Electronics and Information Technology (now renamed to Ministry of Electronics and Information Technoloft or the Department of Telecommunications (under the Ministry of Communications and Information Technology) or by the Ministry of External Affairs (MEA).

As my colleagues have documented in a detailed paper, India has been vocal in global internet governance debates at forums including the International Telecommunications Union, the Internet Governance Forum and the U.N. General Assembly. However, the Indian stance on multistakeholderism has been complex, with the MEA advocating for a multilateral stance while the other departments switched between multistakeholderism and “nuanced multilateralism”—which calls for multistakeholder participation in policy formulation but multilateral implementation. The paper also argues that there has been a decline recently in the vigor of Indian participation at forums such as the 2018 meeting of the Working Group on Enhanced Co-operation (WGEC 2.0), due to key personnel changes. For example, B.N. Reddy, who was a skilled and experienced negotiator for the MEA in previous forums, was transferred to another position before WGEC 2.0, and the delegation that attended the meeting did not make its presence felt as strongly or skillfully.

Cyber Norms for Responsible State Behavior in Cyberspace

With the exception of two broad and unoriginal statements at the 70th and 71st sessions of the U.N. General Assembly, India has yet to make public its position on the multilateral debate on the proliferation of norms for responsible state behavior in cyberspace. During the substantive session of the Open-Ended Working Group held in September, India largely reaffirmed points made by other states, rather than carving out a new or original approach. The silence and ambiguity is surprising, as India has been represented on four of the five Groups of Governmental Experts (GGEs) set up thus far and has also been inducted into the 2019-2021 GGE that is set to revamp the global cyber norms process. (Due to the GGE’s rotational membership policy, India was not a member of the fourth GGE that submitted its report in 2015.)

However, before becoming an evangelist of any particular norms, India has some homework to do domestically. It has yet to advance a clear, coherent and detailed public stance outlining its views on the application of international law to cyberspace. This public stance is necessary for two reasons. First, a well-reasoned statement that explains India’s stance on core security issues—such as the applicability of self-defense, countermeasures and international humanitarian law—would show India’s appetite for offensive and defensive strategies for external adversaries and allies alike. This would serve as the edifice of a potentially credible cyber deterrence strategy. Second, developing a public stance would help India to take advantage of the economic, demographic and political leverage that it holds and to assume a leadership role in discussions. The U.K., France, Germany, Estonia, Cuba (backed by China and Russia) and the U.S. have all made their positions publicly known with varying degrees of detail.

Data Transfers

Unlike in other forums, Indian policy has been clearer in the cross-border data transfer debate. This is a foreign policy extension of India’s emphasis on localization and data sovereignty in domestic policy instruments. At the G-20 Summit in Osaka, India and the rest of the BRICS group (Brazil, Russia, China and South Africa) stressed the role that data play in economic development for emerging economies and reemphasized the need for data sovereignty. India did not sign the Osaka Declaration on the Digital Economy that kickstarted the “Osaka Track”—a process whereby the 78 signatories agreed to participate in global policy discussions on international rule-making for e-commerce at the World Trade Organization (WTO). This was a continuation of India’s sustained efforts opposing the e-commerce moratorium at the WTO.

The importance of cross-border data flows in spurring the global economy found its way into the Final G-20 Leaders Declaration—which India signed. Foreign Secretary Vijay Gokhale argued that international rule-making on data transfers should not take place in plurilateral forums outside the WTO. Gokhale claimed that limiting the debate to the WTO would ensure that emerging economies have a say in the framing of the rules. The clarity expressed by the Indian delegation at the G-20 should be a model for more confident Indian leadership in this global cyber policy development space.

Looking Forward

India is no newcomer to the idea of normative leadership. To overcome material shortcomings in the nation’s early years, Jawaharlal Nehru, the first Indian prime minister, engineered a normative pivot in world affairs by championing the sovereignty of countries that had gained independence from colonial rule. In the years immediately after independence, the Indian foreign policy establishment sought to break the hegemony of the United States and the Soviet Union by advancing a foreign policy rooted in what came to be known as “nonalignment.”

Making sound contributions to foreign policy in cyberspace requires a variety of experts—international lawyers, computer scientists, geopolitical strategists and human rights advocates. Indian civil society and academia are brimming with tech policy enthusiasts from a variety of backgrounds who could add in-depth substance to the government’s cyber vision. Such engagement has begun to some extent at the domestic level: Most government policies are now opened up to consultation with stakeholders Yet there is still room for greater transparency in this process.

India's cyber vision is worth fighting for. The continued monetization of data dividends by foreign big tech at the expense of India’s socioeconomic development needs to be countered. This can be accomplished by predictable and coherent policymaking that balances economic growth and innovation with the fundamental rights and values enshrined in the Indian Constitution, including the right to equality, freedom of speech and expression, and the right to life. But inherent contradictions in the conceptualization of personal data, delays in tabling the Personal Data Protection Bill, and uncertain or rushed approaches in several other regulatory policies are all fettering the realization of this vision. On core geopolitical issues, there exists an opportunity to set the rule-shaping agenda to favor India’s sovereign interests. With global cyber policy formulation in a state of flux, India has the economic, demographic and intellectual leverage to have a substantial impact on the debate and recraft the narrative in favor of the rapidly emerging Global South.