GD Topic | Analyzing The Pros And Cons Of Data Localisation

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GD Topic | Analyzing The Pros And Cons Of Data Localisation

Data sources vary from anecdotal and insignificant to statistically credible and span numerous systems both on-premise, cloud, and third-party data provider networks. The planet has been a global village ever since the internet was born. This implies that data can flow freely all over the world at the moment. Many nations are not satisfied with this agreement. Countries such as Russia and China are now seeking to impose laws on data localisation that would impede the worldwide free flow of data. And so, data localisation has grabbed the Indian government's attention as well.

A topic that draws the attention of many, it might turn up as a topic for group discussion during your admission or placement interviews. So, let’s critically analyze the pros and cons of data localisation.

What is data localisation?

Data Localisation means the collection of data within the country's territorial borders. The data produced in India, for instance, should be stored within the physical boundaries of India. The main reason behind the drive for data localisation laws has been the growing concern about data protection and privacy and the fact that they can’t really stay protected once international boundaries have been crossed.

Many governments insist that the only way forward to ensure that data on the internet is safe and secure is data localisation. On the other hand, advocates of the open internet believe that free internet, which has been the foundation of the global economy, will be undermined by data localisation.

Many hold this conservative stance of data liberalization, arguing that only data scientists and digital analysts can embark on a practical and thorough study of these journeys, while others argue that data should be opened up, ready to be used by all.

Pros of data localisation

Corporatism: In the contemporary political world, data localisation is conducive to the prevailing political narrative that can be heard. Data is incredibly precious and can be the cornerstone of a successful business if properly analyzed.
1. Governments who want to introduce data localisation want to give their local corporations a competitive advantage. In general, businesses use knowledge to consider customers' requirements and even to influence their behavior.
2. By analyzing the data to meet consumers' needs, new products can be created. So there is an economic value in the results.
3. For many international firms, India is a major consumer market. India and other developing countries are therefore conscious of the economic value of data and the importance of localized data.
4. Domestic businesses and the economy of the country would benefit from data localisation and the protection of the data can be ensured as well.
Crime related: If there is a money fraud, for instance, there will be a need to view the payment information when investigating crimes. If the data is stored overseas, it is very difficult to obtain the country's permission to access the data. In solving crimes, this creates delays. This issue can be avoided if the data is stored within the country.
Taxing the data: Data localisation advocates also agree that data should be considered to be a national resource. This implies that the nation's government should have a right to the income produced from that resource. The movement of data in and out of the nation should also be taxed, much as the inflow and outflow of goods and services are taxed. These extra taxes will then be used for further social services by the government.
Employment: Data localisation laws result in the local establishment of several data centres. This will generate many jobs and greatly boost the economy of the country. Innovation would also be powered in the industry, resulting in reduced cost approaches.

Cons of data localisation

Freedom of the internet: The internet is based on the free flow of data principle. If this free flow is impeded by imposing taxes or by undue protectionism, the internet will inevitably be killed. The reason why the internet is favored by many businesses is that it is cheaper and free from unnecessary regulation. If governments make any changes to the current system, the most advanced technology the world has ever created could be destroyed.
Security concerns associated with keeping all the data at a single location are also involved here. Firstly, the very opposite of the diversification approach most widely used by multinational corporations is the storage of all data within one geographical area. Second, people of several nations are not willing to grant their governments the right to spy on them. If all the information is kept within geographical limits, governments would be able to collect all the information and creep into their private data.
India doesn't really have a well-developed system to ensure data protection. The developed nations, on the other hand, already have an integrated system. So, it might not be a prudent decision to rush towards data localisation. The data is vulnerable to cyber attacks without proper resources and the risk here is serious because it includes financial details.

Data localisation is a highly debatable matter. It can be a boon for one party and an absolute bane for the other. We hope the above points will give you some idea for approaching this GD topic.

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