Privacy Act: Parliamentary Body Recommendations to Hit Indian Business Environment, FDI Flows, Global Industry Associations Say

Implementation of the proposed privacy law, as recommended by a parliamentary body, will significantly worsen India’s business environment and reduce the inflow of foreign investment, a dozen global industry associations said in a joint letter to the government.

Industry associations have sought broader consultations with stakeholders before the bill goes to Parliament.

Based in the US, Japan, Europe, Southeast Asia and India, the industry associations including ITI, JEITA, TechUK, US India Business Council and Business Europe represent thousands of companies and technology groups such as Google, Amazon, Cisco, Dell, SoftBank and other Microsoft.

The March 1 letter to Union Communications and IT Minister Ashwini Vaishnaw said the parliamentary body’s report contained new recommendations for the Personal Data Protection Act that, if enacted, would pose severe barriers to India’s innovation ecosystem and create the promise of a trillion dollar digital economy.

Panels have raised concerns about the inclusion of non-personal data, restrictions on cross-border data transfers, data localization obligations, mandatory hardware and AI software certifications.

The industry groups said regulations for companies to store their data locally in India will hurt privacy and cybersecurity by limiting the state-of-the-art solutions available around the world.

“If these and other recommendations in this report are viewed as a whole, their outcome, if implemented, would result in a material deterioration in India’s business environment, adversely affect business operations in and with India and negatively impact India’s domestic launch. ecosystem and global competitiveness,” the letter reads.

The industry groups said the recommendation to create a domestic alternative to the international SWIFT banking system is also unprecedented and goes beyond the scope of the report’s objectives and would have significant adverse impacts on India’s financial sector and digital payments ecosystem.

When contacted, ITI Country Manager for India, Kumar Deep, said: “It requires extensive consultation to turn this into future-proof data protection legislation. India can lead the way in this area of ​​regulation by enacting dynamic data protection legislation that takes into account the interests of all stakeholders.” Opposition parties have also expressed concern about the panel’s recommendations regarding the proposed data protection authority, as well as clauses they believe infringe on states’ rights .

Electronics and IT Minister of State Rajeev Chandrasekhar said on Thursday the government is reviewing concerns that stakeholders have shared with the ministry.

“That’s why we’re very careful that any legislation we make in the digital ecosystem enables legislation… legislation that improves the growth momentum of the digital economy, rather than creating any problems later on,” he had said.

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