Clarity sought on cross-border data flow

The industry has been seeking more clarity on how trusted countries will be defined by the Ministry of Electronics and Information Technology (MeitY) and when they will be notified, three people aware of the matter said. The industry has also asked for a framework to ensure data flows freely across borders. Some have proposed that instead of drawing up a trusted list, the government should provide a list of nations where Indian data can’t be stored.

Last week, IT industry officials led by industry body Nasscom met information technology, electronics and communications minister Ashwini Vaishnaw to share their views on the revised bill.

According to one of the persons cited above, Vaishnaw said that the government will prepare a detailed framework for notifying in which countries data can be stored. The first draft of the DPDP Bill is currently open for consultations, with 17 December set as the deadline for receiving submissions from the industry. Two of the three people cited above said the bill is expected to be tabled at the Budget session of the Parliament in April, and should be passed at best by the monsoon session next year.

“In the interim, until the Bill is passed in Parliament, it would be great if the government could bring some clarifications. These would include a standardized procedure to be followed to identify and notify countries to which the data could flow such that the free flow of data can be enabled with countries that share a positive relationship in trade, investments, etc already,” said Kazim Rizvi, founding director of The Dialogue, a Delhi-based public policy think tank.

The DPDP Bill replaces the PDP Bill of 2019, which was withdrawn in August after a joint parliamentary committee (JPC) raised several concerns and asked for sweeping amendments. The new bill’s stance on cross-border data flow marks a significant departure from the previous bill which requires personal data of Indian users to be stored within the country.

Rizvi pointed out that the uncertainty about the terms of notifying countries could make businesses restrictive in terms of establishing relationships with foreign countries due to anticipation. “It is essential that the government provides some processes on the standards and procedures to be followed to notify countries where data can flow so that business can evaluate the countries using the parameters,” he added.

Despite these concerns, the industry at large has appreciated the new bill and the relaxation of cross border data flow rules. “Cross-border data flow within trusted jurisdictions will allow for a free and fair digital economy to be formed. It will allow SMBs to compete with larger players on a more even footing than before and empower them,” said Vinod Kumar, president of India SME Forum.