On its way to becoming a US$5 trillion economy with nearly 500 million web users, India is second only to China as the largest online market in the world. Increased net penetration, exponential increases in web and app-based business models and ease of launching startups has made the country a crucial jurisdiction for personal data protection and handling.
The government recently approved the Personal Data Protection bill, clearing the way for its passage through parliament before being notified and brought into effect. When the law comes into force, the country will have in place a much needed regime for the handling, storage and processing, by both public and private entities, of personal data, the requirements for consent to access and use of data, the consequences of non-compliance by companies, compensation to affected people and enforcement rules to complete the legal ecosystem of personal data privacy.
The present bill follows the Personal Data Protection Bill, 2018, which was introduced following the recommendations of the high-level Srikrishna Committee. The present bill deals with three classes of personal information, namely general, sensitive and critical personal data. Financial data, passwords, official identifiers, health data, religious or caste data, sexual orientation, genetic data are classed as sensitive information. The new law is likely to permit processing of sensitive data outside the country only if there is an explicit consent from the user. However, handling of critical data can be done only in India and the government will notify what constitutes critical data from time to time. Data which is neither sensitive nor critical will constitute general data and there will be no restrictions on managing and storing such data.
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Manoj Kumar is the founder and managing partner at Hammurabi & Solomon.
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