This article is from WeChat public account: chi like nets (ID: passagegroup) , author: Songbing Chen, the original title: “India is the Internet’s” dividend policy “where ? “, title map from: Visual China

In the end of 2019, India’s data protection law, e-commerce policy, and 5G development path are still in the midst of it. Once the policy falls, who will be the final winner?

This is a peculiar landscape. It will be over in 2019, and some of the vital elements are still absent from India, the world’s third-largest venture capital ecosystem, which is incredible.

As a country with more than $16 billion worth of e-commerce unicorn Flipkart, India still has no e-commerce policy; although there are rumors that it is possible to conduct a 5G spectrum auction, it is still unclear which frequency bands will be used.

The most disturbing thing is that India still has no effective protection measures for collecting personal data without consent or even abusing data that is voluntarily provided.

All policies are still under development. Some players go further than others. Their results will have a profound impact on India’s technology and business ecology, and even determine the outcome of tomorrow.

Of course, in view of the significant stakes, the forces of the various parties have also crossed the sea, and they have launched lobbying activities. All departments are fighting for infighting. Whether it is a foreign player or a local player, whether it is the giant who is currently sitting on the Diaoyutai platform or the ambitious newcomer, it is impossible.

After observing these unresolved legislation, you may be able to understand where the policy sticks will fall.

2018 Personal Data Protection Act

Even today, if a business or entity infringes Indians’ information privacy (illegally collecting, storing, or sharing personal data), users There is basically no hope of defending rights.

But these are about to change.

After the Indian Supreme Court ruled that privacy is a fundamental right, the Indian Ministry of Electronics and Information Technology (about 15 million yuan) or 4% of their global turnover.

Of course, if it cannot be enforced, the authority of the bill will sweep the ground. Therefore, the draft legislation also proposes to establish a data protection agency (DPA) to strengthen law enforcement.

Although the appropriate data collection regulations are acceptable to both businesses and the public, a key element of the bill will put some companies in trouble.

The draft bill states that any entity that collects and processes data (including large technology companies such as Google and Facebook and other similar businesses) must At least one copy of the data is stored in India.

In addition, any sensitive personal information (eg biometric data, password or health data) can only be processed in India.

In addition to ensuring data security and ensuring access to this data, MeitY also hopes that localization will facilitate the development of the Indian data server industry.

What is the argument?

According to several individuals from the Law Drafting Committee, the committee has never elaborated on the pros and cons of the localization clause. “Improving trade barriers and promoting domestic industry development is an import substitution policy (Importsubstitution, which is a measure for developing countries to impose strict restrictions on imports such as tariffs, quotas and foreign exchange controls, The traditional understanding of fostering and protecting the development of domestic industrial sectors) is this mentality,” said one policy analyst.

However, while local data hosting will create new revenue streams for data center service providers in India, it will increase the operating costs of all major technology and Internet companies currently hosting data outside of India.

Generally, the back end of large corporate services is distributed around the world. For example, login information may be placed in one country and financial information placed in another.

“With Amazon, for example, the cost of migrating these applications and data, and hosting on Indian servers, can range from $100 million to $1 billion, depending on the level of localization requirements,” said an e-commerce company. The former executive of the giant said.

The increased cost may have an impact on what services a large technology company provides in India. “If India adheres to a strict localization policy, many services will be shut down. Microsoft’s Hotmail has millions of users. This is a free service with almost zero income, and if the cost increases, the service may be closed.” An industry executive said.

For Silicon Valley, this is a runaway. They are easily monitored by Indian law enforcement agencies. This is especially true for Facebook and its WhatsApp, which is a business model that spreads around its network.

< /p>

But the fears of large technology companies go far beyond that. They are worried that the next step will be the “nationalization” database and force them to share data pools with Indian companies. MeitY has set up a committee to advise on the specification of business data (including aggregated data for users controlled by the platform).

There is no doubt that technology giants such as Google, Facebook, and Amazon are opposed to this localization plan.

Who is involved?

The Internet giants are carrying out subtle publicity efforts, with the main focus being industry associations and think tanks. For example, the Indian Council for International Economic Relations (ICRIER) is underway by the Indian Internet and Mobile Communications Association (IAMAI) funded research to determine the economic cost of localization. Other research institutions are conducting similar research on whether and how consumers are affected by increased business costs.

At the same time, international pressure in India is also increasing. In June, at the G20 summit in Osaka, Japan, India was one of the few countries that refused to sign a declaration of cross-border free movement of data. (with China, Indonesia and South Africa) ).

The above policy analysts said: “The large technology companies realize that unless localization proves to damage the downstream economy, cost theory is difficult to get the government’s approval.”

However, the Indian government is not moving. At the moment it has no other measures to regulate data, nor does it believe that a complex system can be implemented in India, such as the EU General Data Protection Regulations (GDPR)< /span> – the regulations wereThink it is the golden rule of data protection.

In addition, the domestic lobbying group led by India’s largest corporate Reliance Group (Reliance) is also constantly advocating data localization. A member of the Drafting Committee said: “Trustery is strongly supporting localization because it wants to get involved in the data business.”

Reliance has recently entered the data escrow industry, which will be the biggest winner of localization. India’s lobbying groups also include Internet service providers and companies such as Flipkart, which host data in India.

On the other hand, the interests of small companies can be compromised, whether they are Indian companies or foreign companies. “Localization is a challenge for smaller companies and startups, which makes their choice of storing data more limited,” acknowledged a member of the committee.

It is understood that the government will submit the bill at the parliament winter meeting that began in November.

e-commerce policy

Wal-Mart’s Flipkart and Amazon’s recent annual big sales show that even if the economy slows, e-commerce giants are still thriving and on the rise. Despite the e-commerce regulations released earlier this year, the provisions on FDI attempt to curb the market influence of large e-commerce.

However, the proposed e-commerce regulations may eventually become an obstacle for the industry to circumvent. The Ministry of Commerce has issued two draft policies and the third is under development. Once completed, public comments will be made publicly. Until then, the key entity of the policy – the Ministry of Industry and Internal Trade Promotion (DPIIT) will be issued.

What is the policy?

The policy involves some common issues, and of course it is a matter of survival. The relationship between FDI, platform and sellers in the e-commerce sector, of course, so far, e-commerce giants and their lawyers have not yet encountered challenges.

There are still data issues. The data generated by the Internet, the data generated by the Internet giant for many years, through machine learning and analysis. For example, including data on user behavior or buying patterns in different regions and populations, Internet giants may have ownership of the data in the past.

The first draft of this policy is a “think tank” consisting of a government department and an Indian company (including foreign-backed Snapdeal and Paytm) In a hurry, I did not consult any foreign company. Because this policy insists on data localization, allowing veteran players to share data with startups, it has led to severe criticism from US Internet giants.

But soon after, the Indian side prepared the second draft. The course of the policy has not been diverted, but it has been more stringent.

What is the argument?

This draft specifies how large Internet companies collect, aggregate, and process personal data in India. It is said that the purpose of this is to provide a level playing field for large foreign companies and small Indian companies.

The latest draft draws heavily on the first draft, arguing that the data is not owned by the e-commerce giants, and even compares the data to the “social public domain” and belongs to the collective people, not any entity that collects data.

Therefore, the draft says, “There will be a suitable framework for sharing community data with start-ups and companies to serve a larger public interest (provided Solve privacy related issues). How to achieve it? Through “data authorization.”

Of course, heavyweight players like Flipkart and Amazon are not satisfied.

Who is involved?

There are two obvious parties involved. One is a large foreign company that opposes data localization and data sharing: Google, MasterCard, Visa, Facebook and Amazon. These companies want to have the data they get anonymously. Executives at an e-commerce company in the United States believe that, in essence, it is this information that enables them to improve operational efficiency. “This is our intellectual property,” he added.

The other side is a lobbying group in India. They believe that large technology companies must be controlled, so they must localize their non-personal data and share it with startups or companies. Most domestic companies hold this view, including faithful, Snapdeal. The Ministry of Commerce, trade agencies and many advocacy organizations also hold this view.

No need to think too much, the Internet giants are against data sharing. Executives of e-commerce giants believe that this is to force data from them and weaken their advantage over local competitors.

“The end result may be that if the government determines that Reliance is an ’emerging industry’ (terminology in the draft) company, then Some participants should share data with it,” said one executive.

What is worth looking forward to?

The second draft of the draft was strongly opposed by Amazon and Flipkart. Recently, the United States has also stepped up its pressure on this, and the Indian government has suspended plans to promote the adoption of the draft policy. Commerce Minister Piyush Goyal announced that the new draft will be announced in 2020.

The government seems determined to further strengthen regulations on inventory control for e-commerce participants, but plans for data sharing are expected to be put on hold for the time being.


Although the launch of India’s 5G is expected to wait a few years, the mystery of the final decision on the ecosystem will soon be revealed. The core of all this is the competition for spectrum.

What is the policy?

This policy is related to which band India will choose to use 5G.

Due to the 5G nature, the 26GHz band may be the best option for India. First of all, its latency is low. Second, it is able to aggregate most of the frequency bands and is fast. As the number of users increases, most wireless networks will slow down. Ideally, this will not happen in the 5G band.

For the 5G that occupies spectrum resources, the 26 GHz band is ideal for carrying new services. This band also has 3.25 GHz of spectrum resources. In contrast, in the 3.5GHz band (the Indian government has designated the 5G band for pilots), only the 175 MHz band is available. Mobile phone use. The rest is used by the Department of Defense and the Indian Space Research Organization (Isro).

So, although operators will get about 40 MHz in the 3.5 GHz band, they will get more than 10X in the 26 GHz band. 10 times the spectrum, meaning 10 times the speed.

However, the Indian Space Ministry (Department of Space, DoS) does not agree to use this band, they are putting pressure on mobile phones to use 26GHz Frequency band.

What is the argument?

DoS uses a small portion of this band for satellite communications. Geosynchronous satellites for weather forecasting are communicating using a 350 MHz partial band in 26 GHz. DoS is concerned that signals from 5G base stations can interfere with satellite signals.

DoS’s advice has influenced India’s position on this issue. India has submitted it to the World Radiocommunication Conference (WRC), held in Egypt on October 28. This conference is held four years and is hosted by 198 countries and is hosted by the International Telecommunications Union (ITU) to finalize regulations for different frequency bands. The WRC2019 will determine the 5G band.

The material submitted by India has very strict restrictions on specifications. It can even be said that it actually kills 5G in India in the cradle.

Who is involved?

This choice will make India a rival to most of the ITU’s member states.

Providing conditions on the ITU is more like a lobbying activity. A foreign telecommunications executive who participated in the ITU negotiations said: “When you propose these conditions on the ITU, make sure that all other countries also comply withThis condition is to avoid interference from other countries.

With the exception of Russia and China, most other countries seem to be in favor of relatively free use of the 26 GHz band on 5G. If most countries choose to do so, India’s actions will be meaningless.

But on the other hand, Huawei has become a winner inexplicably. Although the Indian government has not approved Huawei’s participation in the 5G test, this provision has inadvertently strengthened Huawei’s position.

Unlike other vendors, most of Huawei’s technologies use lower frequency bands, roughly lower than 6GHz, including 3.5GHz.

What is worth looking forward to?

According to industry insiders, Huawei has been lobbying around the world to ban the use of 26GHz, because China also uses this band for satellite services. According to some sources, this is also the reason why Russia opposes the use of the 26GHz band.

This decision undoubtedly created opportunities for Huawei while making other equipment manufacturers uncompetitive.

account aggregation

In 2015, India established a data sharing framework under the direction of the Indian Reserve Bank’s then president, RaghuramRajan. It allows seamless and real-time sharing of financial data with the consent of individuals and businesses.

This policy came into effect one year later. But now it seems that this policy is not so successful, so that by 2019 it will still be discussed.

What is the policy?

In September 2016, the Bank of India released the 2016 non-bank financial company account poolGeneral Assembly. Through this provision, it created a new type of non-bank financial company (NBFC) – account aggregation platform (NBFC-AA). The regulations also set the framework for the operation of these institutions.

NBFC-AA is similar to an intermediary or broker, accepting customer licenses and passing data from financial companies to other companies that need such data.

For example, you need to borrow from Bank X, but there is an account at Bank Y. The lender needs a bank statement to confirm your credit. At this time NBFC-AA can work, it can be based on customer requirements. The two banks seamlessly transfer data and speed up the lending process.

In addition, account aggregators not only speed up the loan process, but also significantly expand the borrower base.

At present, only 70-80 million people in India can borrow through formal channels, because this requires a credit history. However, although the current account aggregation policy only involves financial information, it is expected to extend to other data sources as well. This allows other sources of data such as educational institutions, pension funds, telecommunications companies, and hospitals to determine credit values. In this way, approximately 3-4 million people will be eligible for loans.

“In a market with insufficient credit services in India, AA is a strong framework that provides new borrowers, especially small and medium-sized businesses, with timely and affordable credit products.” President of Perfios Software Solutions SrikanthRajagopalan said, “Let a small and medium-sized micro enterprise survive and develop, it can create 10 jobs, thus promoting a virtuous circle.” Perfios is one of eight account aggregation agencies approved by the Reserve Bank of India. However, these companies are currently limited in their operations..

What is the argument?

The problem is with data protection.

The account aggregation platform came into being, but India still lacks data protection regulations. In this case, in order for the proposed framework to work, users need to ensure that their data is processed and shared. Otherwise, it can only be left to financial institutions to explain.

Also unclear is the way in which these companies are realized. Similar to the payment network, there is also a card issuer and an acquirer in this framework. But the value proposition of the intermediary is not clear.

“For financial information providers like banks, if you are my client, lend me a loan, I will give you a 3% net interest margin, and the bank can earn up to 50 rupees by providing data. Then, the data provider What is the value proposition?” asked an account aggregator executive.

This raises the third key issue – banks are reluctant to participate.

Who is involved?

There is no doubt that banks are a big player.

In 2016, when the government began to implement UPI (unified payment interface), the bank was not happy. They believe this is a threat to their existing payment system (NEFT and IMPS) and revenue. Banks don’t want to see new things to eat.

Again, banks are not happy to see the account aggregation platform. “The problem with banks is that they must invest in infrastructure that others can use freely,” said the executive.. Not only that, they must also provide data to competitors.

The executive said: “Unless the Reserve Bank of India (RBI) issued an order requiring banks to do so, there is no reason for the bank to Participate in this action.”

In 2019, the non-profit account aggregation platform alliance Sahamati was established. Sahamati’s job is to promote the account aggregator framework, led by technology entrepreneur BGMahesh, and is working with data users and providers. Does its appearance help solve the problem?

What is worth looking forward to?

The situation is not optimistic.

Sahamati has its limitations. “It’s a group, an influential coordinating body. But unlike NPCI, NPCI promotes what UPI does, and Sahamati can’t do it,” said an executive at an account aggregation agency.

However, if this policy is passed, the potential will be huge. On a global scale, there is no precedent. This strategy will eliminate any friction in data exchange. Like UPI, this will be another first in India.

But the Bank of India has been focusing on bigger issues, such as bad loans for banks, and is developing an audit framework for them. Once this policy is not going well, banks and other financial institutions will return to liberation overnight, and the account aggregation platform will cost about 20 million rupees per year The investment of RMB 2 million) and years of hard work will also be lost.

This article is from WeChat public account:Zhixiang Network (ID:passagegroup) , Author: Songbing Chen, the original title: “India is the Internet’s” dividend policy “Where?