In beginning June, a 24-year-old Muslim man in Pune was killed by a group of people for allegedly uploading “derogatory pictures of Shivaji and Bal Thackeray” on facebook. In the latest development in the murder case of the IT professional, the police claim that the “offensive” pictures were published through proxy servers based outside India. This is not the first time when posts on social media have resulted in outrage and violence. The Assam riots in 2012 witnessed several morphed images being circulated in the social media that resulted in inflaming the situation and causing unanticipated violence.

Despite the Information and Technology Act, 2000 (IT Act) fixing responsibility, the actual culprits in such cyber crimes remain untraced. This is largely because the information is transmitted using multiple proxy servers – which seems to fox our law enforcement agencies and is beyond their purview.

The technical jargon used for collecting, organising, summarising, analysing, synthesising information about companies and individuals using algorithms, and then using it for decision making, is termed as Big Data Analytics. All large web portals, including facebook and Google have their revenue models based on this methodology. When it comes to Big Data, India – because of its huge varied demographics – is the favourite destination for big business houses, with the latest entrant being Intel. Data suggests that internet penetration in India is just 17% of the total population.Which means there is a huge hitherto untapped market. Yet, most of this data is stored in servers abroad.

Which is why the extraction of information about users can be an uphill task. This despite the fact that there is a constant upsurge in people communicating through social mediums, sharing their personal information in various e-commerce portals and relying on various search engines for information and feedback. “The biggest reason behind it is the fact that majority of the servers are based outside India”, says Pavan Duggal, Supreme Court advocate and Cyber Law expert.

Undoubtedly, the cost of placing domestic servers in India is a long term exercise. According to Duggal, “Till such time, at least, we can force the proxy servers to be placed in India”. He adds, “We need to get involved with the international community. India is not even a signatory to the Convention on Cyber Crime”. The Convention on Cyber Crime is an international treaty formulated in Europe that seeks to address Internet and Computer Crimes by increasing cooperation among nations.

With lack of employment opportunities and potential security threats from various quarters, the disadvantages of not having localised servers in India are huge.

a)  THE OPPORTUNITY COST: According to a report by NASSCOM in 2012, the global market for data centres is around US$ 106 billion. India is one of the fastest growing markets, having a minimal share of US$ 2.2 billion. The employment opportunity that opens up with the promotion of data centres is unfathomable. If successful, it has the potential to strengthen both organised and unorganised sectors. Importantly, with a huge task force of engineers across the country, it can open new markets for budding entrepreneurs who can set up business houses with revenue models based on Big Data analytics which can help strengthen the economy.

b)  SECURITY THREAT: “The information and data transmitting through proxy servers shall be a threat to any country”, says Duggal. According to him, most crimes committed using proxy servers are never solved because of the inefficiency of Indian authorities and also the incapability to exercise extra-territorial jurisdiction. Also, as per a report in The Hindu on the Pune case, the Maharashtra police has “little hope of tracking the culprits who posted the derogatory pictures on facebook”. Duggal says ”Almost all the cyber crime cases involving multiple proxy servers, meet a dead end”.

c)  TAX EVASION: There had been reports in the past, suggesting that many enterprises are evading taxes by maintaining their accounting data in servers based outside India. If proxy servers are used in such a fashion, it leaves no room for Indian agencies to track the movement of black money outside India. Duggal says, “The Indian agencies will have to strictly implement the Information and Technology Act, 2000 to maintain due diligence in such cases. We need to stop letting this law become a ‘toothless wonder’”.

There’s also the flip side with reports suggesting that the Indian government asked Vodafone to intercept calls, which makes the proposition of placing servers in India a double edged sword. Duggal agrees. “There should be a harmonised balance between privacy of individuals and increasing interceptions”.

Another threat that comes with proxy servers being placed in India is from Section 66A of the IT Act. Duggal, calling 66A “unconstitutional” and a “loose cannon” says, “The combination of a proxy server in control of Indian agencies along with 66A shall be deadlier. But with all its probable disadvantages, placing proxy servers shall be advantageous in maintaining the data sovereignty of the country”.

The Home Ministry has asked for a report from the state government on the Pune incident. And it’s important to note that the new government at the Centre is aiming to proactively involve people through the online medium and even mentioned Digital and Cyber Security in their manifesto. Maybe soon we shall see a shift in India’s decisions on saving data in domestic servers.