India is set to introduce a new privacy bill that will relax its approach to data storage, processing, and transfer, benefiting both global companies like Google and Indian firms seeking growth abroad. The bill, which is yet to be made public but has been approved by Union Cabinet, allows companies to export data to any country except those specifically named by the Indian government. This move comes as India tries to strike a balance between business needs and individuals’ data privacy rights, making it an attractive market for global internet giants while also safeguarding consumers’ interests and promoting home-grown enterprises.
India’s Shifting Approach to Data Transfer
India’s previous draft of the Digital Personal Data Protection Bill in November restricted the export of data to specific regions named by the government. However, the new draft version allows companies to export data to any country unless explicitly restricted by the Indian government.
Focus on Data Consent and Usage
The revised bill emphasizes the requirement for companies to obtain consent before collecting personal data. It also restricts companies from using personal data for purposes other than those mentioned in the contract between the parties involved. This means that companies cannot anonymize personal data and use it for products like artificial intelligence models.
Wider Say for Sector-Specific Regulators
Under the proposed legislation, sector-specific regulators, such as the central bank, will have a greater influence over data rules for the industries they oversee. This move aims to ensure industry-specific data protection and regulation tailored to the needs of each sector.
Facilitating Business Operations
The bill allows companies involved in mergers, acquisitions, or spinoffs to export and store data as required. This provision enables smooth business operations while ensuring compliance with data protection regulations.
Pending Parliament Approval
The amended bill is scheduled to be presented for approval in the Indian Parliament’s upcoming session, which begins on July 20. Once approved, the bill will pave the way for the enforcement of the new data transfer regulations in India.
Way Forward:
India’s decision to relax its data transfer rules presents a significant opportunity for global companies, including Alphabet Inc.’s Google, and Indian firms seeking international growth. By allowing data export to most countries while safeguarding individuals’ data privacy rights, India aims to strike a balance between economic expansion and protecting consumer interests. As digitization continues to flourish in India, this move aligns with similar actions taken by other countries to regulate data transfer and ensure a robust framework for data protection.
