The session is envisaged to emphasise on the need for developing harmonised global data governance frameworks which enable cross-border data flows while balancing it with other policy objectives (privacy, data protection, freedom of speech and expression, economic development etc.), leading to inclusive and sustainable development, on the lines of SDG 17.3 and 17.14 pertaining to enhancing global macroeconomic stability, including through policy coordination and policy coherence for sustainable development. The following adverse consequences of restricting cross-border data flows would be discussed, based on evidence-based research conducted by Consumer Unity & Trust Society: 1. Digital Exports – The trade of digital services exports across the border is significantly based on the free flow of data and favourable policies in destination countries facilitating trade. Global data flows hold potential for firms to enter new markets, generate business insights, facilitate efficient management of global value chains and improve business practices. Strict restrictions placed on cross-border flow of data would hinder how digital services are traded with such countries. Similarly, digital services exports of many countries rely heavily on imports of data-intense inputs from abroad. Thus, in the context of global value chains, restricting the data flows would also impact the source of digital service inputs. Therefore, such measures would harm efforts towards achieving SDG 17.11, i.e. significantly increasing the exports of developing countries. 2. GDP, FDI and Innovation – Any restriction on cross-border data flows and will have an adverse impact on GDP, of which the IT industry holds substantial economic value, particularly in countries like India. The services sector attracts substantial FDI equity inflows, where digital services is a major component. Additionally, IT industry fosters growth through indicators such as innovation, FDI, exports for the wider digital economy. It is observed that digital services export positively correlates with GDP, FDI Inflow, and indicators of innovation such as start-up ecosystems and patents filed. This directionally signifies that any impact on digital services export will affect the GDP, thereby slowing the achievement of SDG 9 with respect to promoting innovation. 3. Employment – A general assumption pervades the discourse that data localisation will lead to the growth of data centres industry, and thus creating employment opportunities. However, data centres are largely automated system, where the number of technical staff associated including maintenance and security staff is less. Initially, temporary employment would be generated during the construction of data centres and associated supplies of hardware. On the contrary, curbing cross-border data flows would hold adverse impact on digital exports, resultingly lowering employment opportunities in the IT/ITES sector, bearing consequential impact on SDG 8. 4. Consumers – Experts believe that restricting cross-border flow of data would adversely affect various consumer welfare parameters such as innovation, privacy and data protection, freedom of speech of expression, quality of service etc. This is likely to have a ripple denting effect on consumers, uptake, usage and trust of select data-driven services. Discussions during the session would also touch upon exploring international best practices for governing cross-border data flows, as speakers would deliberate on the various pros and cons of different agreements and laws, such as Chart of signatures and ratifications of Treaty 185: Convention on Cybercrime, The US Clarifying Lawful Overseas Use of Data Act, 2018, Digital Economy Partnership Agreement between New Zealand, Singapore and Chile, Japan Data Free Flow with Trust initiative by Japan etc. This would shed light on the principles through which adequacy, mutual recognition and equivalence can be ensured within global data governance frameworks.
