Written by Talent KAS

Related Topics: Free Trade Agreements (FTAs), ASEAN


India declined to agree to the e-commerce chapter of the Regional Comprehensive Economic Partnership (RCEP) agreement.

Why India is opposing the e-commerce chapter of RCEP?

  • The e-commerce chapter contains clauses that, if India had agreed to them, would have prevented it from implementing data localisation rules on companies doing business in India.
  • While the e-commerce chapter has some clauses that affect data localisation, India has been trying to water these down.
  • Clouding the issue further is that the annexe on financial services, already agreed upon by all the RCEP countries, which says that the domestic laws of a country regarding keeping financial data within a country supersede the RCEP agreement.
  • The section on transfers of information and processing of information says that “a party shall not take measures that prevent transfers of information, including transfers of data by electronic or other means, necessary for the conduct of the ordinary business of a financial service supplier.”
  • However, the same section also says that nothing in paragraph 2 [the paragraph containing the previous clause] prevents a regulator of a party for regulatory or prudential reasons from requiring a financial service supplier to comply with domestic regulation in relation to data management and storage and system maintenance, as well as to retain within its territory copies of records.
  • This basically means that India cannot be prevented from asking financial companies to maintain a copy of their data within India, but it is unclear still whether India can mandate that such data must only reside within the country

About RCEP

  • Regional Comprehensive Partnership (RCEP) is a proposed Free Trade Agreement (FTA) between sixteen countries namely 10 countries of ASEAN (Brunei, Cambodia, Indonesia, Lao, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and their six FTA partners namely Australia, China, India, Japan, Korea and New Zealand.
  • It is expected to provide market access for India’s goods and services exports and encourage greater investments and technology into India.
[Source: The Hindu, PIB]

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Talent KAS

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