India: GDPR – What It Means For Indian Business?

Last Updated: 31 August 2018
Article by Seema Jhingan

With digital and cross border transactions growing at an exponential rate, protection of personal data has become a critical issue with multi-jurisdictional implications. The recent and most significant example of protection of personal data being that of the European Union's ("EU") regulation on protection of natural persons with regard to processing of personal data and free movement of such data ("General Data Protection Regulation" or "GDPR") that came into force from May 25, 2018 onwards. GDPR on account of its extra-territorial applicability has given rise to certain significant questions on its implications on non-EU organizations, which I have attempted to address below.

Does GDPR apply to Indian Companies?

One of the key underlying principles of GDPR is to ensure that when personal data of persons staying in EU is transferred to non-EU countries, the GDPR's data protection safeguards goes with such data. To put it simply, GDPR has an extra-territorial application and even applies to processing by entities situated outside EU, of personal data of persons of EU in relation to offering of goods or services to such persons or monitoring their behaviour in so far as it takes place within EU.

Consequently, Indian entities who are acting as either a 'controller' (i.e. the person who determines the purposes and means of the processing of data) or a 'processor' (i.e. the person who processes the personal data on behalf of the controller), of personal data of EU residents, become subject to GDPR. GDPR therefore is likely to have significant impact on the technology/data processing Indian companies operating in say the information technology, international e-commerce, outsourcing sectors.

When is cross-border data transfer to non-EU countries (like India) permitted?

Adequacy Decision: GDPR permits international data transfer to non-EU countries, subject to European Commission's ("EC") decision that they ensure an adequate level of protection. However, so far, the EC has granted such 'adequacy decision' to only a handful of countries and India is not one of them.

Alternative Appropriate Safeguards: In the absence of an adequacy decision, for cross-border transfers of personal data to India, the 'controller' or 'processor' should provide for appropriate safeguards, such as adoption of pre-approved (GDPR compliant) binding corporate rules by multinational companies for transfer of personal data to their group companies in India; making use of standard data protection clauses adopted by the EC or supervisory authority;1 or adoption of pre-approved codes of conduct drawn up by associations/ bodies representing categories of controllers or processors.

Other Exceptions: Cross-border transfer of data can also take place in certain specified situations such as where explicit consent of the data subject (after being informed of the possible risks) has been obtained or where transfer is necessary for reasons such as performance of contract between data subject and controller; public interest; for establishment, exercise or defence of legal claims; for protecting vital interests of data subject or other persons, or where the data subject is physically/legally incapable of giving consent, etc.

What are the Key Implications for Indian Companies?

It has become imperative for Indian entities handling personal data of EU residents, to implement the data protection requirements stipulated in GDPR within their systems, particularly as their EU counterparts are likely to insist on compliance with the GDPR as part of their standard contractual clauses given the heavy penalties associated with GDPR non-compliance and regulations governing cross-border transfer of personal data.2

GDPR compliance for Indian companies can entail a significant overhaul and re-writing of their privacy policies and contractual arrangements with EU counterparts and data subjects and internal data protection protocols and systems to make them GDPR compliant. Depending on the role of the Indian entities vis-à-vis the obligations imposed on 'controllers' and 'processors' under GDPR and their applicability, this may inter alia include:

  • Provision of additional rights to data subjects as available under GDPR such as fair and lawful processing of data (which inter alia requires that the data subject be informed of the existence of the processing operation and its purpose); rights to obtain rectification of inaccurate personal data, right to obtain from the controller the erasure of personal data concerning without undue delay in prescribed circumstances, right to data portability, to be informed if the data is to be processed for other purposes, etc.
  • Obtaining of consent which is specific, informed and unambiguous. While, this could include ticking a box when visiting an internet website, but silence, pre-ticked boxes or inactivity would not constitute consent. If the processing has multiple purposes, consent should be given for all of them.
  • Implementation of other appropriate technical and organizational measures to inter alia ensure security and safety of data; meet the principles of data protection by design and by default (such measures could consist, inter alia, of minimizing the processing of personal data, pseudonymising3 personal data as soon as possible, transparency with regard to the functions and processing of personal data, enabling the data subject to monitor the data processing, enabling the controller to create and improve security features); due reporting of data breaches within a specified time period; appointment of data protection officers and carrying out of data protection impact assessment where applicable.

The operational compliance burden and associated costs with GDPR may prove to be substantial, particularly, for smaller companies (especially startups operating on shoestring budgets). That said, the Indian Government is seeking to further strengthen its regulatory framework for data protection and privacy (and Shri B. N. Srikrishna Committee's new data protection bill is currently under discussion), the data protection compliances are likely to become a matter of utmost significance for all Indian companies in the future (and not just with companies having business interests in EU).

Endnotes

[1] Till date, the EC has issued three sets of standard data protection clauses – two for data transfers from EU data controllers to non-EU data controllers and one set for data transfers from EU controllers to non-EU processors.

2 Please note that failure to comply with the GDPR requirements can attract administrative fines of up to EUR 10,00,000 or 20,000,000, or in the case of an undertaking, up to 2% or 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, depending on the nature of provisions breached.

3GDPR defines 'Pseudonymisation' as processing of personal data in such a manner that the personal data can no longer be attributed to a specific data subject without the use of additional information, provided that such additional information is kept separately and is subject to technical and organisational measures to ensure that the personal data are not attributed to an identified or identifiable natural person. Pseudonymised data is subject to more relaxed standards of data protection under GDPR than other personal data.

Disclaimer: LexCounsel provides this e-update on a complimentary basis solely for informational purposes. It is not intended to constitute, and should not be taken as, legal advice, or a communication intended to solicit or establish any attorney-client relationship between LexCounsel and the reader(s). LexCounsel shall not have any obligations or liabilities towards any acts or omission of any reader(s) consequent to any information contained in this e-newsletter. The readers are advised to consult competent professionals in their own judgment before acting on the basis of any information provided hereby.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Seema Jhingan
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions