Data privacy- Positive Impact on Software Services Export from India

Software Services Export

Data privacy & its importance

Let’s relate data privacy on a large scale with our standard lives, the most important aspect which a human being always seeks for its protection (Which may be a security of their house, family, future and a lot of other things). Things become a bit of complex and critical when it comes to secure any confidential data as a small abyss in its security may lead to severe consequences.

We can call our modern world a digital one as most of the transactions and data processing occurs through digital resources. When data is exposed on the internet, it is already vulnerable to attack from hackers and other threat organizations. Therefore, data privacy is as much as important as oxygen for the survival of living beings.


Indian Data Privacy Policy

 A data protection bill has been drafted and submitted on July 27, 2018. The draft is popularly known as Personal Data Protection Bill. The report focuses on existing data protection framework and its merits/demerits. The report also suggests how to take firm actions regarding the implementation of data regulation and protection laws.

There are few highlights of the proposed bill as given below:

  • The requirements for the collection and processing of personal data would be established, including limitations on the processing of sensitive personal data and the length of time in which personal data may be retained (Localization of data is a focus area)
  • The organizations would require appointing a Data Protection Officer and require third-party audits of the organization’s processing of personal data on annual basis.
  • Further, the Bill would require organizations to implement certain information security safeguards to prevent misuse, modification, and disclosure of personal data.
  • Non-compliance with the Bill would result in penalties up to 50 million Rupees (approximately USD $728,000), or two percent of global annual turnover of the preceding financial year, whichever is higher

As for an online transaction we need a website or gateway with SSL Certificate on ecommerce website to ensure a 100% safe & secure transaction as it uses a private key which is known to only intended parties. Much in a similar way- New Indian data privacy policy would set a transparency between data processor and its owner. Now organizations must make sure that personal data is gathered legally and under strict conditions. Also, institutions who collect and manage it will be obliged to protect it from misuse – or face penalties for not doing so.


Impact of Indian data privacy policy on Software Service Exports

 The growth of the cloud computing industry in India: The good news is that India is now in a select band of countries moving towards a comprehensive data protection regime. Localization might aid the growth of the data center and the cloud computing industry in India, but as a matter of wider public policy, such an approach is extremely myopic. Competitiveness will yield positive outcomes in the long term.

Mixed impact on IT industry export services: The $167 billion Indian IT industry is export-driven and deals with data of citizens and companies in the US, the EU and other parts of the world. The comparative trade advantages would be enjoyed by one section of Indian industry which in turn, mandates a strict data localization regime. This strictness could be perceived as a restrictive trade barrier and retaliatory measures. A McKinsey study has estimated that cross-border data flows have resulted in the world gross domestic product getting a boost by as much as 10%

An excellent move, the Indian data privacy policy can be viewed as a much-needed, game-changing development which will set the benchmark for any future international regulations pertaining to data privacy and protection.


Image courtesy: Google.

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