The other important change that is being contemplated in the proposed legislation relates to the jail sentence for executives charged with breach of data security.

Proposed data privacy rules may see changes Only critical data to be hosted in India
Atom Data Privacy Wednesday, July 24, 2019 - 19:54

The Indian government appears to have listened to the concerns expressed by the United States on the data privacy provisions introduced by India. The sticking point was the Indian government’s and the Reserve Bank of India’s insistence that the personal data collected by foreign entities from the Indian public will have to be hosted in servers physically located within Indian territory. Now, it is learnt that the Indian government has climbed down on this and said only ‘critical’ and ‘sensitive’ information will be covered within this provision. Now there is no clarity yet on what exactly constitutes ‘critical’ and ‘sensitive’ information. 

The other important change that is being contemplated in the provision of the proposed legislation; the Data Protection Bill relates to the jail sentence for executives charged with breach of data security.

The issue of data security has been on top of the agenda within the Indian government, particularly, the ministry of electronics and IT (MeitY), which has already prepared a draft Personal Data Protection Bill, 2018. The provisions of this law may not be as stringent as the GDPR in Europe. However, the ones to feel the immediate pinch are the companies like Google, Facebook, Cisco, Mastercard, Amazon, PayPal, Twitter and American Express, all American. Sure enough, the US government stepped in and the issue is said to have figured in the talks top officials in the US administration have had with their Indian counterparts in recent months. There is already some kind of tension between the two governments over imposition of import tariffs. The US government has been making aggressive moves including taking the issue to the WTO.

It is not certain if the Data Protection Bill will be introduced in the Indian Parliament during this session itself. The Bill envisages the creation of a Data Protection Authority which will oversee the implementation of the Data Protection Act or whatever it is finally called. The Union Minister is said to have assured these large US corporations that this independent authority will take a call on what the ‘critical’ and ‘sensitive’ data will be. The Americans are however skeptical of the way the matter is being approached by the Indian side.

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