TikTok, which allows users to create and share short videos with special effects, has been downloaded by nearly 300 million users in India, out of more than 1 billion downloads globally, according to analytics firm Sensor Tower.
India's Ministry Of Information and Technology has asked the Chinese company to explain how it collects user data and creates awareness for safe use of its platform, while several Indian lawmakers have raised concerns about content on TikTok.
ByteDance said in a blog posted on its website on Sunday that it was taking "a significant step towards establishing a data center in India," as the country frames a data protection law.
"This is in line with our constant endeavor to ensure that we have the best interests of our local users at heart." It gave no more details.
TikTok was briefly banned in India last April after a court directive said the app encouraged pornography and could expose children to sexual predators. The ban was revoked after an appeal by TikTok.
Separately, Swadeshi Jagaran Manch, a Hindu nationalist group close to Prime Minister Narendra Modi's ruling Bharatiya Janata Party, has called for a ban on TikTok, alleging that ByteDance has a poor track record on privacy protection.
ByteDance has previously said India is one of its strongest markets in which the company plans to invest $1 billion over the next three years.