Since e-commerce is important, it is necessary to pay attention to cross-border data flows. Such data flows also occur in ads on search engines, on social media, messaging services, online entertainment streaming, credit card transactions and online delivery of services. These business leverage their access to data. New entrants without such access cannot survive for long.

India has huge data output. It could be leveraged for economic development. The draft e-commerce policy recognises this. Due restrictions could be placed on cross-border outflow of data collected by IoT devices and data generated by users. It stimulates data monetisation.

There are criticisms of this policy of restrictions. It is called protectionist. But if such outflow hurts India, this protection is justified. Another point is that other countries like the US could prevent outflow of their data to India as retaliation. It hurts the exports of IT services. But this is exaggerated. This comes under General Agreement on Trade in Services under WTO. Another issue is the access to cloud computing by SMEs and start-ups. But here an exception can be made and data flows restrictions would not apply to cloud computing services. One more criticism is regarding monopolisation due to localisation. But market dynamics do not allow such monopolisation. New firms emerge in India itself. WTO negotiations too focus on restrictions of cross-border data flows. Global players want the free data from other countries and would not want other countries to leverage their own data. G20 is being used to compel India to join the negotiations.