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 Finance Minister Nirmala Sitharaman on Wednesday announced that the government will set up Data Embassies in the country to facilitate seamless digital transfers and continuity for other nations.

Data embassies create a new approach to securing data by leveraging diplomatic agreements bolstered by cloud technology solutions.

A data embassy is a solution implemented by nation states to ensure a country's digital continuity with particular respect to critical databases.

"We will facilitate the setting up of Data Embassies for countries looking for digital continuity solutions," Sitharaman said during her Union Budget speech in Parliament.

Small countries around the world are turning to the concept of "data embassies" because they are in need of sovereign and resilient infrastructure.

Estonia, one of the world's most mature countries in digital administration, authorised a data embassy in 2015. Luxembourg, Monaco and some other nations have adopted the Data Embassy model.

According to a Google Cloud blog post, there are several components that comprise a data embassy.

"A data embassy must have a secure, resilient data infrastructure that can protect a nation's data from cyber and physical threats. They should have a robust mechanism to ensure efficient data back-up and fail-over, as well," it said.