Data Laws in India and How Economy is Suffering

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The importance of data has been talked about again and again. Data is being rightfully called as a resource by many and has been compared to oil. You can’t actually see data like you can see other commodities. Also, no one talks about the term “Data Industry” like there is Oil Industry. Most data companies are viewed as tech companies. I want to give a different perspective of the data industry by comparing it to oil industry as more people understand about oil industry. Also, if we are talking about data as a resource I will write about data resources of India.

Data Industry

Data industry comprises of a lot of companies that use data as a key resource or raw material. Majority of famous tech companies these days are data companies. These companies are called tech companies because we only see their technical products. Most of these companies have built modern systems that collect, process, extract and deliver data. That is a key part of their business and technology.

Statement 1: Data companies are those that use data as a raw material. In general, these companies process data for different use cases and make a product or make a product to gather data and then process data. These companies are worth more than a trillion dollar. Compare it with oil, where crude oil is the raw material, it is processed with the use of heavy machinery and then made into suitable products. Very similar. However, the trading procedure of crude oil is properly defined.

Inference: Data is a valuable resource like oil. You might have read it online before as well nothing new here.

India is very very diverse country with 1.3 billion people. From nature to humans we have a lot of data compared to other countries. We are literally sitting on a data mine. If data is a resource like other resources, that should put us in a strong position globally in the data industry. You would assume that our data is being protected and we are making good amount of money from our data resources. Sadly, this is not the scenario. In fact, the situation is completely different. Although, this is a global issue not specific to India.

Personal data of billions of people in India has already been taken over by large multinational companies. These companies have built great platforms. Can you imagine this thing happening with oil, that a company just comes to India takes oil and says:

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“Hey, we are going to sell you petroleum out of it, thank us later.”

Current laws and regulations are centered around how the company that has collected data, uses the data, that is, processes or extracts the data. One noteworthy thing is that there is no compensation to the data provider. The government is also not benefiting from this trade. Also, these companies are easily able to justify their actions based on current laws and regulations. Most of the companies would term themselves as advertisement companies but are actually data companies, rather data collecting companies. Also, the collected data is sold to many other companies/partners for a lot of money. Again, the data provider gets no monetary compensation. This is also due to the fact that there aren’t properly defined data trading laws and markets. I am pretty sure there is a black market for data, although I haven’t verified the claim.

Data drain: Collection of data from Indian citizens to the servers of these companies, located in a few world leading countries.

Statement 2: Crude oil is sold as a raw material. It is sold as a commodity. Data in India is just being collected, processed and sold without the people of India or the government getting anything out of it. This is data loot. Although law doesn’t categorize it as loot and we are not being forced to give away data. It’s just that we are being tricked.

Imagine this happening in the colonial era, colonial powers coming to India, getting all the raw materials, making products out of it and selling them to us. In my opinion, it is a fair comparison.

When will we start valuing our data resources?

In the current system we look really stupid. The problem with data is that, it is not matter and most of the people who are above voting age don’t understand it’s value. I don’t blame them. People are giving away their data for free.

What answers would we give to our future generations?

To them it would be like, we had a lot of data, we didn’t know how to use it or process it. We gave it away for free. But hey, we had a lot of data.

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China has very effective policies to monitor personal data of their citizens and their country, in general. Many people call it autocratic rule, but again we only see or find out about China what these data companies want us to.

India is a data hub, we have more than 1.3 billion people. We need to protect and safeguard our interests in this regard. We still have a lot of data that needs to be protected. This would be when people actually start realizing the worth of data. I don’t see this happening anytime soon.

The main point: With China almost restricting access to its data resources and India being a data hub, it gives us an excellent opportunity to take initiatives on a global level to start developing an ecosystem where the 3 involved parties, the corporates, the government and data providers benefit more. The world needs an open platform where data can be traded freely, entities buying data aren’t scrutinized for their usage of data and also data providers get compensated. This will open up a lot of employment opportunities, keep the companies happy and a lot of other consequences. This will give a major boost to our economy. Although, again I don’t see India taking this step, perhaps the EU will do something.

Statement 3: Many algorithms (all AI/ML algos) require data for development. These algorithms in turn help in generating profit. I think it is fair for data providers to get some monetary compensation for providing data. It could be achieved via data royalty.

There could be data royalty programs which provide royalty to data providers based on the value of their data. This itself is a very big opportunity. There could be data banks to store data. Data royalty would also suppress these powerful multinational giants and ensure monetary compensation to data provider. Although most people won’t understand data royalty at first and it would require much more time to explain, it’s a thing for future. The first step is in accepting that there is an issue that needs to be addressed.

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