India Prepares To Upgrade Data Protection Laws

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

14 October 2003

According to recent reports, India is seeking to improve its data protection regime in order to attract more European firms to outsource business there.

Although cheap labour costs and a generally high level of technical competence mean that India is the favoured choice for IT and other outsourcing in the United States, the EU is limited by the 1995 Data Protection Act, which restricts the data which can be sent to a country without protections equivalent to those in place within the European Union.

Currently, India does not have the requisite level of data protection in place.

The Times of India revealed last week that although the Indian authorities are not planning to create a data protection act as such, they are prepared to consider amending the Information Technology Act 2000 to strengthen data privacy.

However the preferred approach, according to the Indian newspaper, would be to negotiate a similar 'safe harbour' agreement with the EU as currently exists with the United States.

Under the terms of such an agreement, EU firms would be able to voluntarily adhere to rules recognised by the European Commission as providing adequate protection, and so meet the requirements of the Data Protection Directive with regard to transferring data out of the European Union.

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