(Image source from: US News & World Report)

The two United States senators have called on Prime Minister of India Narendra Modi to sharpen India's stance on data localization, warning that measures requiring it represent "key trade barriers" between the two nations.

In a letter to Modi dated Friday and seen by Reuters, the U.S. Senators John Cornyn and Mark Warner - co-chairmen of the Senate's India caucus - urged India to rather adopt a "light touch" regulatory framework that would let data to flow on the loose across borders.

The letter comes as relations between Washington and New Delhi are strained over multiple issues, including an Indo-Russian defense contract, Indian tariffs on electronics and other items, and India's push to purchase oil from Iran despite upcoming U.S. sanctions.

Global technology companies including Mastercard, Visa, and American Express have been lobbying India's finance ministry and the Reserve Bank of India to loosen up proposed guidelines that mandate all payment data on domestic transactions in India be stored inside the country by October 15.

The letter is most probably a last-ditch attempt after the Reserve Bank of India told officials at top payment companies this week that the central bank would implement, in full, its data localization directive without extending the deadline or allowing data to be stored offshore as well as locally.

"We see this as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership," the U.S. senators said in its letter.

-Sowmya Sangam