Tech Companies Against India’s Proposed Data Law

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Technology firms have opposed India’s data protection move as it may affect business models and investment plans

Global technology giants have made a joint effort to oppose India’s new personal data protection move that limits the cross-border flow of data and prevent misuse of personal information. The US-India Strategic Partnership Forum, Washington-based Information Technology Industry Council (ITI), techUK, and India’s NASSCOM are among the companies that have extended their support to the opposition.

In a letter addressed to the Information Technology ministry, the tech firms have cited their concerns that the new law might affect the business models and investments of domestic as well as foreign companies. Google, Salesforce.com Inc, Microsoft and Wipro have also come up in the issue’s support.

Impact on tech firms

After Vietnam’s cybersecurity law for technology firms, India’s proposed data protection law has highlighted the probable issues that tech firms dealing with the country will be facing. An increase in the infrastructure costs has emerged as the major concern. Experts have pointed out that investment plans that are lined up would also be affected.

The US-India Strategic Partnership Forum, reportedly, is working towards an agreement on the data protection. The draft addressed to the IT ministry, as reported by Reuters, has mentioned that the fear of restrictive regulation has the potential to negatively impact the flow of foreign investments.

After Vietnam, now India has made it to the list of countries seeking to restrict the free-flow of data. This has left the major tech groups around the world worried over their free functioning in the country.

The proposed data law has a penalty of Rs.15 crores of the total revenue of any domestic or global data collection firm for violating personal data processing provisions, failing which, might lead to an additional 5 crores or 2 per cent of the total revenue earned.

Apart from the data protection law, the government has come up with drafting policies for the regulation of data stored by cloud computing, e-commerce and payment companies.

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