Industry stakeholders hail data protection bill as a welcome move

The Digital Personal Data Protection bill 2023 tabled in Lok Sabha on Thursday has been largely seen as a welcome move by stakeholders across the country, even as it gives overarching powers to the State on select issues.

“ This bill has added a couple of additional powers with respect to what the government can do. Notably, the point that the government has the ability to call for information is a very broad based power,” said Shahana Chatterji, a partner at Shardul Amarchand Mangaldas & Co. “It also talks about the government’s power to take down data fiduciaries' computer resources under certain circumstances,” she added.

The bill has journeyed to its fifth iteration incorporating some of the finest provisions from global examples and yet maintaining an India-specific character. While the 2023 rendition is not dramatically different in architecture compared to the bill’s 2022 version, industry experts see it as a positive move, especially for businesses in India.

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“The bill aims to establish a crucial foundation of trust between individuals and entities processing their data, while defining clear standards of accountability and responsible data management, ensuring a more balanced privacy-conscious ecosystem,” said Amrita Jain, Senior Associate at Singhania & Co LLP.

The maximum penalty that can be imposed on an entity for an instance of non-compliance has been set at Rs 250 crore, whilst relaxing data localisation mandates. Cross-border data flow has been permitted globally barring countries/territories notified by the Centre.

However, with strict data storage and security requirements, companies may have to loosen purse strings for appropriate infrastructural investments.

“In the beginning there could be a need for companies to make additional investment to revisit the current ways of processing data, which in long run would help such companies in building trust,” said Manish Sehgal, Partner, Deloitte India.

Experts that spoke to DH unanimously expressed hope on the bill’s passage in both houses of the Parliament to receive a Presidential assent. Some expect a transition period before implementation of its provisions.

With a lot left to subordinate legislation and notifications by the central government, the bill once enacted, will serve as a preliminary document kickstarting a solid foundation.