Challenges facing India in implementing Data Privacy regulations

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Aditi Shirpurkar

Advocate pursuing Intellectual Property Law at IIT-KGP

India, with its population of over 1.3 Billion, is a rising digital market. Companies have been investing in India to tap the potential of a broad consumer base. A wide consumer base means more expansive access to data and consumer information. The consumer information includes personal and non-personal data. Personal data is involved, and data privacy becomes a concern. Data privacy or information privacy deals with the proper handling of data (specifically personal data), which requires consent, sharing, and processing according to the regulations and laws. It is essential for companies involved in data collection and processing to abided by the Data Privacy regulations to avoid legal and economic penalties.

India does not have specific legislation for Data Privacy; however, a Personal Data Protection Bill, 2019 is pending to be passed in the parliament. There are sectoral laws and regulations (laws specific to a particular sector or industry such as telecommunication, medical, etc.) that have specific provisions regarding data privacy. However, there is a lack of comprehensive Data Privacy regulation in India. Since India does not have comprehensive Data Privacy regulation and mechanism, the enactments which currently cater to the Data Privacy compliance and regulations are the Information and Technology Act, 2000 and the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules, 2011. The IT Act and the IT Rules lay down the provision regulating the collection, sharing, and processing of personal data and sensitive personal data and information and the penalties for non-compliance.

Apart from the lack of a specific Data Privacy Regulation, there are other challenges to implementing Data Privacy regulations in India. These challenges include lack of awareness about Data Privacy regulations and compliance, inadequate infrastructure, deficiency of appropriate tools for data privacy implementation, lack of strong governance, and the overlap of the jurisdiction of various laws.

Lack of awareness about Data Privacy, Data Privacy Regulations, and Compliance

A primary challenge in implementing Data Privacy regulations in India is ignorance, apathy, or the lack of knowledge about Data Privacy, Data Privacy Regulations, and the compliances for Data Privacy. The lack of awareness about Data Privacy and Data Privacy regulations is found in both consumers and the companies that deal with data. The ignorance among the consumers poses a threat to their data privacy. It exposes them to unwanted data collection, sharing, and processing.

The lack of awareness in the companies that deal with data and regularly collect, share and process data is a significant cause of concern. Until the companies have good data privacy policies and adhere to all the Data Privacy regulations, protecting consumers’ data privacy will be a challenge. This adherence to the Regulations will only be possible if the Companies have full knowledge of the rules and compliance they need to follow to secure Data Privacy.

Deficiency of appropriate tools for data privacy implementation

Another challenge for implementing the Data Privacy regulations in India is that many companies, especially
start-ups, have difficulty finding the appropriate tools (such as the necessary software and hardware) for implementing the Data Privacy compliances under various regulations. A deficiency in implementing proper data privacy safeguards can incur losses to companies in terms of monetary and credibility. Finding the right tools for data privacy compliance is an essential process for implementing Data Privacy Regulations.

Inadequate infrastructure

India is an emerging digital economy, but the infrastructure required to fulfill the need for increasing and secured digital access is insufficient. The inadequacy of the infrastructure, such as access to secure internet connections, servers, and intermediaries, impedes implementing Data Privacy regulations. The Data Protection Bill 2019 stipulates the necessity for companies to store sensitive personal data in servers located in India. The lack of sufficient server infrastructure is another challenge that needs to be addressed by companies and the Government.

Lack of strong governance

The companies dealing with data need to have strong governance for ensuring data privacy. Any leak or unwarranted sharing of data is risky for the company and its consumers. To ensure water-tight Data Privacy compliance, the companies need to have strong governance. It includes regular data privacy compliance audits, regularly updating the tools for data protection, having a robust and transparent data privacy policy, and sound legal assistance. The better the data privacy governance is, the easier it is to implement Data Privacy regulations.

Overlap of jurisdictions of various laws

From a legal perspective, one of the challenges in implementing Data Privacy regulations is multiple laws dealing with data privacy provisions. There is sometimes a jurisdictional overlap wherein it becomes unclear which Regulation shall be applicable. For example, a telecommunication service provider shares sensitive information of the consumer with a third party; there may be a jurisdictional issue between the authority of TRAI and the authority under the IT Act.

India is undergoing Digital transformation and is proving to be a good hub for investors and companies that want to access a wider consumer base. As digital penetration increases, the need for securing Data Privacy increases. Hence, the requirement of robust implementation of Data Privacy regulations becomes necessary. Creating awareness, using appropriate tools, strong governance, and developing infrastructure can help implement the Data privacy regulations in a better way.

Ayottaz can help you understand more about how to become Data Privacy-aware and become future-ready.

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