> I'd much rather store properly encrypted personal information or financial data in North Korea than storing it unencrypted in my home country.

You might feel comfortable with that as an individual, but geopolitically speaking, India would be giving North Korea a pretty bargaining chip by letting payment processors store their data there (if they were so inclined). Imagine the havoc that could be caused! By requiring data residency, it is instead India who gets a pretty bargaining chip against these huge multi-national corporations.