What Does India’s Data Protection Bill, 2021 Mean for Foreign Businesses?


India is on the cusp of adopting a in depth and new info security legislation.  

It is just about 2 several years given that the Particular Facts Defense Monthly bill, 2019 was referred to a Joint Parliamentary Committee (JPC) for assessment. On 16 December 2021 the JPC submitted its report together with a draft Info Security Bill, 2021 (New Monthly bill) to the Parliament of India. 

The New Monthly bill is expected to be passed into Indian law later on this calendar year by the Parliament.  

The previous iteration of the New Invoice was modelled largely together the traces of its European Union counterpart, the Normal Data Safety Regulation (GDPR). However, the New Invoice is diverse from GDPR in materials respects and is broader in scope than GDPR, for case in point it consists of non-private knowledge, regulations on social media platforms, and facts localisation. 

For foreign enterprise organisations, whose privacy tactics are progressively getting GDPR centric, the New Monthly bill results in considerable further compliance obligations. International organizations doing business enterprise in India will now have to devote major time, hard work and revenue to comply with the extra obligations beneath the New Invoice.

Some of the essential JPC recommendations reflected in the New Invoice that impact performing business in India are:

  • Facts Localisation – Evolving State of affairs: Having a nationalistic strategy, the JPC strongly favours data localisation and has recommended that the Central Govt: (a) should assure that a mirror copy of the delicate personal facts and significant individual data stored abroad is brought again to India and (b) formulate a detailed facts localisation plan in consultation with the sectoral regulators. This technique towards information localisation could probably act as an entry barrier for foreign businesses. On the other hand, these are tips at this phase and have not been precisely integrated in the draft of New Monthly bill. In relation to facts localisation and crossborder data transfer, the New Monthly bill makes it possible for conditional cross-border transfer of ‘sensitive personal data’ and there are no additional conditionsfor cross-border transfer of ‘personal data’. Having said that, ‘critical private data’ (which is still to be outlined), can’t go away the region besides in extremely restricted circumstances, these as wellbeing and crisis expert services or the place the Central Government makes it possible for this kind of transfer. 
  • Cross-Border Data Transfer – A Appropriate Strategy? The JPC encouraged that the Central Governing administration really should perform a consultative position with the proposed Details Security Authority (DPA) in approving cross-border transfer of delicate personal facts through a agreement or an intra-group plan. The sector thinks that this will make the entire procedure of cross-border info transfer cumbersome and sluggish. Moreover, the New Invoice states that any such contract or an intra group scheme should really not be accepted if it is against ‘public policy’ or ‘State policy’. From a socio-political standpoint, the touchstone of ‘public policy’ or ‘State policy’ may perhaps additional complicate factors for overseas corporations. 
  • Non-Individual Information – Fork in the Road? The JPC has suggested inclusion of non-individual information inside the scope of the New Invoice. There is deficiency of clarity on the interplay of non-individual info with private data and privateness underneath the New Monthly bill. It is proposed that the laws on non-personal data will be crafted later and subsumed inside the regulation. This technique appears to be quite unorthodox and lacks certain global precedent as very well. The inclusion of non-individual data represents a fork in the highway between the New Bill and GDPR (and other key international rules on info protection). If non-personal information is basically provided in the New Invoice as proposed by the JPC, international enterprises may possibly have to re-structure their info architecture for India. 
  • Facts Breach – Acquainted Premise, Various Tale: Like GDPR, the JPC has advised that all particular knowledge breaches, irrespective of regardless of whether hurt is prompted to a information principal (akin to facts subject matter), ought to be described to the DPA inside 72 hours of turning out to be mindful of the breach. Apparently, the New Bill also specifies that a data breach will now involve a breach of nonpersonal details as nicely. If this reporting necessity is carried into regulation, it will outcome in enterprises having to issue in non-particular details compliance obligations in their over-all inside compliance approaches. 
  • Children’s Personal Info – Tread with Caution: The age of majority in India is 18 decades and the JPC has retained this threshold for an particular person to provide lawful consent. This is unique from the worldwide standard which ranges from 13-16 many years. The JPC advised that knowledge fiduciaries (akin to details controller) working solely with children’s information should sign-up them selves with the DPA, confirm the age of the boy or girl and get consent of the child’s father or mother or guardian. Curiously, in terms of the draft New Bill, irrespective of the relevance of young children to the company, all info fiduciaries will be barred from profiling, tracking, behaviourally checking children and their info, or targeting advertisements at youngsters, or processing any personalized details that can bring about important hurt to the little one. This could confirm to be burdensome for firms and, if the New Invoice is passed by the Parliament in its existing type, they could have to critique the architecture of their engineering. 
  • Social Media Platforms – Precarious Protected Harbour: The JPC has recommended that social media platforms must be accountable for the content they host from unverified accounts. As a basic follow, most foreign social media platforms have a selection-dependent model for person verification. If the suggestion gets to be legislation, social media platforms will have to abandon this design and mandatorily validate accounts in purchase to steer clear of intermediary liability. The JPC has also advisable that no social media system must be authorized to function in India unless of course the mum or dad corporation handling the technological know-how sets up an business in India. 

The New Invoice and the JPC recommendations pose perhaps considerable worries for overseas businesses executing company in India due to the fact the new Indian regime will impose diverse and extra compliance obligations than these that the providers are utilized to dealing with and which may well not be capable of effortless or brief fulfilment. 

“The articles of this doc do not always replicate the views / place of Khaitan & Co but continue to be exclusively those people of the creator(s). For any further queries or observe up please get in touch with Khaitan & Co at  [email protected]

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