This story is from October 16, 2018

US and India duke it out over data and jobs

At the stroke of midnight on Monday, American commerce giants such as Visa, Mastercard, AmEx and Amazon among others were in violation of Reserve Bank guidelines that ban the international transfer of data generated by transactions in India.
US and India duke it out over data and jobs
Visa, Mastercard, AmEx and Amazon among others were in violation of RBI guidelines that ban the international transfer of data.
Key Highlights
  • American commerce giants such as Visa, Mastercard, AmEx and Amazon among others were in violation of Reserve Bank guidelines that ban the international transfer of data generated by transactions in India.
  • The RBI now requires payments companies to store all information about transactions involving Indians solely on computers in India.
WASHINGTON: Overnight, India and the United States have stumbled into another trade spat. It’s over data – now regarded as the new oil, or gold.
At the stroke of midnight on Monday, American commerce giants such as Visa, Mastercard, AmEx and Amazon among others were in violation of Reserve Bank guidelines that ban the international transfer of data generated by transactions in India.
The RBI now requires payments companies to store all information about transactions involving Indians solely on computers in India, a concept known as data localization.
But Indian user data continued to be transmitted and stored offshore even after RBI’s October 15 midnight deadline with the US companies seeking more time to implement localization, while at the same time arguing that would push up their costs without necessarily improving the security of Indian e-commerce clients. They also maintain Indian customers would no longer fully benefit from their global anti-fraud systems, even though repeated leaks have demonstrated their security to be patchy.
While some companies have indicated they are willing to comply with the new RBI norms, others have been lobbying US lawmakers to bail them out of leaving behind a trove that is fast becoming a contentious matter across the world both on account of security aspects and the potential for its monetization.
Seeking a “light touch” regulatory framework that would allow data to flow freely across borders, Senators John Cornyn (Republican) and Mark Warner (Democrat) wrote to Prime Minister Narendra Modi last week to warn that “We see this (data localisation) as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership,” according to Reuters.
Some companies such as Amazon, WhatsApp, and Paytm have indicated that they are in the process of complying with the new norms, while others such as Visa and Mastercard have sought a one-year extension to implement their plans. “Compliance with local laws and regulation is a top priority for us in all the countries we operate in. We continue to work closely with the regulator towards this,” Walmart, which is now heavily invested in India through FlipKart, said in a statement.

Data sovereignty has become a hot button issue across the world, particularly after companies such as Facebook and Google have come up short multiple times in safeguarding user data.
The latest tangle came even as Washington continued to strangle the H1B guest worker visa program that is largely used by Indian skilled professionals. New Delhi regards the Trump administration’s growing restrictions on the visa category as a trade barrier that inhibits movement of professionals in the service industry.
Following its decision to revoke work permits for H4 visa holders (spouses of H1B visa holders), it now transpires that the Trump administration has begun shortening the duration of stay of H1B visa, in an effort to protect what it says in foreigners taking over American jobs.
In a lawsuit filed last week, the Dallas-based ITServe Alliance, representing small IT companies run by Indian-Americans in the US, alleged that the US Citizenship and Immigration Services has recently begun a practice of approving H-1B petitions for shorter than three years durations.
"These petitions are often valid for only months or days at a time, and some cases are expired by the time the approval is received," it said.
This is the second lawsuit filed by ITServe against USCIS. In the first lawsuit filed in July 2018, ITServe demanded USCIS to remove language from their website prohibiting F-1 STEM OPT students working at the third part client locations.
"The USCIS has been making arbitrary rules and memos for over eight years, it's our top priority to set things right and hold USCIS accountable to follow the regulations set by the Unites States Congress," said ITServe's national president Gopi Kandakuri.
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