The Centre plans to finalise the Digital Personal Data Protection (DPDP) Act rules by April. Industry bodies have raised concerns over data localisation and verifiable parental consent, urging a balanced approach to safeguard privacy while supporting innovation.
Key Concerns of the Data Protection and Privacy Protection Act
The Data Protection and Privacy Protection Act, passed by Parliament two years ago, has introduced several key concerns for the industry. One of the primary concerns is data localisation, which refers to the requirement to store and process data within the country’s borders.
Data Localisation Provisions
The draft rules propose a data localisation provision that requires data to be stored within the country for at least 30 days before it can be transferred to a third-party server. This provision has raised concerns among the industry stakeholders, including ITI Council, Nasscom, and BSA. • The ITI Council has expressed concerns that the provision may lead to a data silo effect, where data is stored in a single location and not accessible to other stakeholders. • Nasscom has highlighted the need for a more nuanced approach to data localisation, one that balances the need for data security with the need for data accessibility.
The draft rules also impose a 5% tax on data processing and a 2% tax on data storage. The Centre has proposed a 5% tax on data processing and a 2% tax on data storage, but industry bodies have expressed concerns that these rates are too high and could deter businesses from investing in India.
The Indian Government’s Data Localisation Policy
The Indian government has been pushing for a data localisation policy, which aims to ensure that sensitive data is stored within the country’s borders.
However, the draft rules do not provide clear guidance on what constitutes verifiable parental consent, leaving room for interpretation and potential inconsistencies in application.
The DPDPA’s provisions on verifiable parental consent have raised concerns among stakeholders. • *Lack of clarity*: The draft rules do not provide clear guidance on what constitutes verifiable parental consent, leaving data fiduciaries to interpret the provision in their own way.
Technical Implementation Challenges
The ITI submission raised concerns about the technical feasibility of the proposed rules, particularly for smaller businesses and platforms. The industry body emphasized that the rules would require significant investments in infrastructure and resources, which could be a barrier for smaller entities. • The ITI submission highlighted the need for a more detailed and technical analysis of the proposed rules, to ensure that they are workable and aligned with global best practices.
Further details on this topic will be provided shortly.
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