India explores setting up data embassy in UAE: What is it, role it could play

It is an embassy in the sense that it operates under the host country’s own laws and jurisdiction, just like a chancery building. The home country retains access and control over its data, which is protected and not subject to the host country’s jurisdiction.

That New Delhi and Abu Dhabi have mutually decided to set up data centres in each other’s territory goes on to show the amount of trust the two countries have in each other, say officials. For India, the data to be digitally backed-up in the UAE territory may include crucial financial data and public records. However, data thus stored will only be accessible to the home country and its authorised representatives, officials added.

According to an official statement by the Ministry of External Affairs (MEA), “It has been agreed that both sides would explore the possibility of setting up Digital Embassies under mutually recognised sovereignty arrangements.”

When asked about the proposal, Foreign Secretary Vikram Misri said, “It will include data that the country considers of national importance and strategic value. There are not too many successful examples of this concept being executed in too many places in the world but there are a few.”

In 2017, Estonia became the world’s first data embassy, after it entered into an agreement with Luxembourg. In 2021, Monaco’s e-embassy was established in Luxembourg.

“It is a new concept for us… We may have to work out a regulatory framework getting into this. But it is an interesting area in which the UAE has expressed interest and we are willing to work with them and see how we can set this up, while, of course, respecting the fact that data has certain sovereignty-related issues attached to it. We will work through those issues,” Misri said.

In simple terms, a data embassy comprises a set of servers that store a country’s data under its jurisdiction while being located in another country. The archives stored are inviolable and thus exempt from search, requisition, attachment or execution.

In the 2023-24 Budget, the government proposed for data embassies in the country to facilitate seamless digital transfers and continuity for other nations. MeitY (Ministry of Electronics and Information Technology) is said to be working on formulating a policy to allow countries and international companies to establish data embassies within Indian territory. The proposed policy is expected to offer diplomatic immunity to the data stored within these embassies, shielding it from Indian regulations.