Modi cabinet clears data protection bill, will soon be tabled in parliament

The cabinet of Indian Prime Minister Narendra Modi approved a data protection bill on Wednesday for tabling in parliament, taking the country a step closer to framing a privacy law.

“The protection of personal data is a very important subject globally,” Environment Minister Prakash Javadekar told a news conference after a cabinet meeting.

“How that will be done (here) and how work will progress keeping India’s interest and people’s interest in mind, this is what this bill is about.”

The Personal Data Protection bill, drafted by a panel headed by a former Supreme Court judge and submitted to the government last year, is key for how firms including global tech giants Amazon, Facebook, Alphabet’s Google and others process, store and transfer Indian consumers’ data.

Although the full extent of changes in the bill is not known, the draft cleared by the cabinet expects social media firms to develop a voluntary method for users to verify themselves, a source familiar with the matter told Reuters.

The bill mandates that personal data categorised as sensitive will be stored or processed only in India, the source said, declining to be named as details about the bill in its current form are not public.

It also says that data deemed sensitive will have to be stored in India but can be processed outside of the country, the source said.

India’s banking regulator last year directed foreign firms such as Mastercard and Visa to store their payments data locally for “unfettered supervisory access”.

It later clarified that transactions made in India could be processed outside of the country but the related data should be brought back for local storage within 24 hours.

Other non-critical or non-sensitive data could be stored outside India, the source said.

Companies proven to be in breach will face a penalty of up to 150 million rupees (2.09 million USD) or 4 per cent of their global turnover, whichever is higher, the source said.

India’s technology ministry was did not immediately respond to a request for comment outside business hours.