India To Get Its Data Protection Act Together

New Delhi, May 26: | Updated: May 27 2003, 05:30am hrs
To secure the sanctity of data and provide comfort to global companies that outsource their business processes, India could have a Data Protection Act in place as early as eight months from now. The National Association of Software and Service Companies (Nasscom) along with the ministry of information technology is preparing a draft for the Act.

The two have already prepared the first draft and Nasscom hopes that the final draft will be in place in 4 to 5 weeks.

We hope that in the next 6 to 8 months, the Act would be passed by Parliament. This Act will take into consideration the minimum requirements set by the European Union (EU), Nasscom president Kiran Karnik told eFE.

The Act will provide legal safeguards and ensure that data are not accessible to third parties or unauthorised persons under any circumstances, he said.

This will help bring in more IT-enabled services (ITES) work to India from EU. The United States (US) is so far the largest market for the Indian ITES industry.

EU has laid down stringent rules on data outsourcing and four American states are also considering legislation to ban outsourcing of state data processing contracts to developing nations. These American states are New Jersey, Maryland, Connecticut and Washington.

The threat from EU is greater than it is from the US, and this Act will help us retain our position in the EU markets, Mr Karnik said. We see the ban on outsourcing and visa-related allegations against software companies as a threat faced by the developed countries on the employment front. However, the cost benefits offered by the country (India) are immense and outsourcing is on the rise, he said.

One such company, eFunds, that handles back-end work for New Jersey, was asked to shift its back-end operations to the US from India. As a result, eFunds moved the work handled by 12 people back to the US for New Jersey back-end operations.

India is a prime base for our activities, especially call centre and business process outsourcing. We have not shut down any of our centres in the country. Instead we have adjusted these people (12 employees on New Jersey account in Mumbai centre) to another account, eFunds marketing communication director (international) Karen Williams told the paper over a telephonic interview from London. She added, We are planning to build more capacity in future in India, if additional capacity is required.

Meanwhile, commenting on the detention of an IBM employee by Malaysian authorities, Mr Karnik said, Visa issues are taking a serious turn for Indian software companies and we are holding discussions with international policy makers and the global companies.