From: Financial Times

By George Parker in Mumbai and Bede McCarthy in London

David Cameron is to sign a cyber security deal with India in response to fears that British personal and business data stored on Indian server farms are vulnerable to attack.

The prime minister said the cyber attacks could come from criminals and terrorists but did not deny that China was another possible threat to both countries.

He will sign a bilateral co-operation agreement in New Delhi on Tuesday with Manmohan Singh, his Indian counterpart. Downing Street said the pact would mark “an unprecedented level of co-operation with India on [computer] security issues”.

Speaking in Mumbai Mr Cameron said: “Other countries securing their data is effectively helping us secure our data. I think this is an area where Britain has some real competitive and technology advantages.

“The threat in terms of cyber security comes from all sorts of different places and organisations – a lot of it is criminal. Hacking bothers me wherever it comes from.”

The co-operation between India and the UK will focus on protecting intellectual property, sensitive commercial and government information and personal identity details.

Significant UK business and personal data are stored on Indian server farms as companies increasingly turn to IT outsourcing companies , such as Tata Consultancy Services and Infosys. The rise of cloud computing and “big data” technologies means that critical data, including intellectual property, can be stored anywhere in the world and accessed instantly – but it also means that such data are exposed to criminal activity.

India is expected to have overtaken the US by 2015 to become one of the biggest online populations in the world, with an expected 300m users – more than double its current 137m.

Cyber security has leapt to the top of the national security agenda since Jonathan Evans, MI5’s director-general, said in a speech to the City of London last year that the amount of hostile activity being generated by foreign states in cyber space was “astonishing”.

Mike Rogers, head of the House intelligence committee in the US, said last week that China and Iran were intensifying cyber assaults against US targets. He warned that the threat had “grown exponentially both in terms of its volume and damage it’s doing to our economic future”.

Though many are reluctant to point the finger publicly at China, security researchers spoken to by the Financial Times said the country hosts a thriving trade in intellectual property theft, with daily attacks against the networks of western companies.

EU lawmakers are considering a draft cyber security directive that would require companies to monitor online security more rigorously and face sanctions for failing to report breaches.

In Washington, the National Security Council said it had “substantial and growing concerns about the threats to US economic and national security posed by cyber intrusions, including the theft of commercial information”. Its comments came after the New York Times, Wall Street Journal, Washington Post and Twitter all said hackers had tried, in some cases successfully, to access their systems in the space of a week.

The newspapers blamed Chinese hackers for the attacks but China’s foreign ministry said such accusations were “groundless”.