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Global Companies Are Migrating Data Servers to India The urge to operate in India has prompted the giants to bow down to data localization

By Aastha Singal

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


India has established itself as an important market for international internet companies. As much as the Indian economy is developing, the country's youth has been able to mark a distinctive presence in the online space. While a number of Indian tech-based startups were born in the recent years, they are yet to take the lead.

Be it in social media, e-commerce or mobile segment, non-India-based companies have emerged as the biggest players in majority of industries. The infamous Cambridge Analytica Scandal however has terrorized Indian internet users of consuming their services, as its data is recorded and stored in foreign servers.

Indian government took this opportunity to hit two birds with one stone. Implementing data localization was a trump card which was able to hit the right chords. Bending international giants to set up data servers locally not only proved the India's strength but also brought forward nation's ideology of self-reliance.

Xiaomi's Turn-Over to India

Chinese mobile maker Xiaomi is the latest global name to migrate its data of Indian users to local servers. The company will be using the existing infrastructures of Cloud service providers Amazon Web Services (AWS) and Microsoft Azure, which according to Xiaomi India's Vice President Manu Jain are "highly secured".

"At Xiaomi, data privacy and security are of utmost importance to us. We are taking one more step towards user data security and privacy by bringing our Cloud services to India for all local data needs," he said in a statement.

Xiaomi will migrate all the existing Indian users' data on to local servers by mid-September whereas the data from other Xiaomi platforms would be migrated by the year-end. The data was earlier stored in secured AWS servers across Singapore and USA. The data migration is expected to accelerate the access speed.

Unlike other global brands, Xiaomi has always supported the idea of moving its servers to India. Last year, the Indian government had asked about 20 mobile manufacturers to outline the procedures undertaken by them to ensure security of user data.

Alibaba is All for Data Security

Data localization has started an entire debate between the international giants who are accepting the aspect and the others who are not. Chinese giants, however, are backing data migration. After Xiaomi, the multinational conglomerate Alibaba has also come in support of India's data localization plan for global internet companies operating in the country.

The company has claimed that it is localizing data in all the countries it operates to promote data security while providing a sense of safety to users. However, the giant is apprehensive about building trust in Chinese cloud technology among the Indian users but plans to magnify Alibaba Cloud's presence in the country.

Given the high amount of demand for cloud computing services among businesses in India, the Chinese giant has high hopes to tap the market. Alibaba Cloud is among the largest public cloud service providers in China and offers a comprehensive suite of services globally to businesses. Alibaba had opened its first data centre in India in Mumbai last year.

Government's Interference

E-commerce major Amazon was also not spared from data localization. The Indian government recently asked the American giant to set up its servers in India but also to prevent unbridled cross-border migration of customer data. The platform has millions of subscribers from India and local storage of their data will make a big hit on the company's operating costs.

While the authorities are concerned about the safety and security of Indians, they are also worried about the element of consent. "Localization of servers in India and having an element of consent of Indians is important for usage (analytics) of the data," IT and communication minister Ravi Shankar Prasad had said.

The government is working on a data protection framework as recommended by Justice B N Srikrishna-led panel to ensure that data generated through e-commerce operations do not go out of the country. The draft of Data Protection Bill further proposes that the explicit consent should be taken for processing sensitive personal data.

What is The Road Ahead?

Companies like Paytm, Microsoft and Google have lent their support for data localization. Government's insistence was also able to bring WhatsApp on board recently. However, its UPI app is still battling for operating permissions due to the organization not having a physical presence in the country yet.

Nonetheless, the international giants have agreed to move Indians' data to local servers. While the process might take time and increase data processing costs of some organizations, it will have a positive effect on the Indian users and instill a sense of safety in them as they use the platforms.

Aastha Singal

Entrepreneur Staff

Former Features Writer

A business journalist looking to find happiness in the world of startups, investments, MSMEs and more. Officially started her career as a news reporter for News World India, Aastha had short stints with NDTV and NewsX. A true optimist seeking to make a difference, she is a comic junkie who'd rather watch a typical Bollywood masala than a Hollywood blockbuster. 

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