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Industry Associations Raise Concerns About Data Protection Bill With IT Minister

Industry Associations Raise Concerns About Data Protection Bill With IT Minister

Associations said that the Bill will affect the ability of global technology companies to sustain their business in India

They also mentioned that the move will raise company costs by 30-60%

Through this letter, the associations have requested to remove the clause of “forced localisation requirements”

Days after the deadline for suggestions on data protection bill, a letter by a group of industry associations to minister for electronics and IT Ravi Shankar Prasad has said that the bill would hamper the abilities of global technology companies to continue its business in the country.

The group also mentioned that it would raise costs by 30-60% and will also not help guarantee data security.

The group that signed the letter include associations such as the United States Chamber of Commerce, United States-India Business Council (USIBC), Japan Electronics and Information Technology Industries Association (JEITA) and DIGITAL EUROPE.

Some of the major global players in the technology field such as Apple, Microsoft, Google, Canon, Fujitsu, Uber and Nokia are members of these associations.

According to reports, the group has placed a request to remove the aspect of “forced localisation requirements” from the draft bill, in the letter.

“Data localisation requirements in the draft (Bill) will have significant negative effects on the ability of companies to do business in India, do not serve to further privacy protection, and are likely to undermine the security of Indian citizens’ data,” the letter said.

The Indian government had introduced the Personal Data Protection Bill 2018 in July. Under the proposed bill, companies have to store a copy of all personal data within a server within India.

Earlier in April, the Reserve Bank of India (RBI) had asked all payment system operators in the country to store data relating to its customers within the country  in order to ensure that the user details stay secured during privacy breaches, in April 2018.

According to reports, this aspect of the bill has been criticised majorly by the foreign companies who have called the move to be “restrictive”.

At present, the union government has been receiving public feedback and opinions regarding the bill.

The concern regarding the data localisation move has not only been raised by the foreign-based companies, but recently in September, the Telangana government had also raised similar concerns stating that certain clauses of the data protection bill, especially the aspect of data localisation may isolate the Indian startups.

The state government also opined that the bill will provide an obstacle for investments both within the state and the country.

However, while foreign industries are arguing against the data localisation move, the digital payment giant Paytm has voiced its support on the clause of storing data within India. The decision was also backed by China-based multinational conglomerate Alibaba.

While some stand for the view and some argue against the move, one needs to consider that will the bill help at a time when there are several questions regarding the data privacy issue worldwide.

The issue related to data privacy can be well understood after the major Facebook-Cambridge Analytica fiasco. The social media giant Facebook had accepted that it had shared personal data of over 87 Mn with political consultancy firm Cambridge Analytica out of which 5.62 Lakh users were Indians.

While at the same time, Facebook-owned messaging service Whatsapp is facing challenges in India on the front of the spread of fake news.

At a time, when data privacy is not being ensured, it is difficult to say that these demands by the associations would be favourable.

[The development was reported by ET]