Data protection bill to be introduced tomorrow in parliament: What is it & its impact on the web3 in India
India is introducing the Digital Personal Data Protection (DPDP) Bill to regulate data usage, impacting web3 and emerging technologies. Critics highlight exemptions and limited provisions for privacy.
emerging tech
Highlights
- India's DPDP Bill to safeguard digital personal data
- Bill allows individuals to protect their digital rights
- Government faces criticism over exemptions and limited provisions
India is set to take a significant step towards safeguarding citizens' digital personal data with the introduction of the Digital Personal Data Protection (DPDP) Bill in the Lok Sabha on 3 August 2023.
The bill, which will be presented by Ashwini Vaishnaw, the Minister for Electronics and Information Technology (MeitY), aims to regulate how entities can utilise individuals' data.
This development follows the approval of the DPDP Bill by the Union Cabinet, and it is a response to the endorsement and calls for swift enactment by the Parliamentary Standing Committee on IT and Communications. The bill, which was first introduced in 2022, has undergone multiple consultations, leading to various revisions by the government.
What is the Digital Personal Data Protection Bill?
The Digital Personal Data Protection (DPDP) Bill of India is a proposed law that would regulate the processing of personal data in India. The bill was introduced by the Ministry of Electronics and Information Technology in November 2022.
The new bill would establish a number of steps for an individual to protect their digital rights, including:
- Have details about what personal data is being collected about users
- Access their personal data Request that their personal data be corrected or deleted
- Have objections to the processing of their personal data
- File a complaint with the Data Protection Authority if their data protection rights are violated
It would also impose some regulations on organisations that are collecting data. Some of these would be:
- Get consent from users before processing their personal data
- Use the data only for the purposes for which it was collected
- Keep personal data secure
- Delete personal data when it is no longer needed
How does the bill impact web3 and emerging technologies?
India is going through multiple technological advancements in terms of AI development, blockchain technologies and more.
Currently, web3 in India is at a nascent stage but start-ups and web3 platforms working with similar technologies have also voiced their concerns on how the upcoming bill could impact their future in India.
The Elite Web3 Forum welcomes the Data Protection Bill in general. At the same time also request the government to provide a compliance holiday period under exempted categories to web3 startups and crypto exchanges so that they should not be overburdened with additional restrictions and compliance costs. Blockchain and the web3 industry have some potential conflicts to follow Data Privacy Act which can only be overcome through a Zero-Knowledge proof mechanism and that is also in the nascent stage and evolving. Thus in the initial years, we request to exempt this industry from compliance with this bill.
Crypto exchanges have also been under the pump due to the heavy taxation on crypto in India and the gradually waning interest of investors. While crypto exchanges have been steadfast in deploying AMA (Anti-money laundering) and mandatory KYC norms on their platforms, the regulatory uncertainty has driven numerous crypto, NFT and blockchain startups out of the country. Will the new bill make things worse?
The upcoming data protection law will mark the first time our nation has adopted a principle-based approach, especially in the ever-evolving tech space. This is a landmark step and paves the path for other principle-based laws.
Arguments against the bill
The government has been getting a lot of stick for giving itself exemptions from some of the provisions in the bill. It has been reported that the bill does not even acknowledge that its provisions will impact the fundamental right to privacy of Indians as the word ‘privacy’ seems to be only written in the bill when it quotes a particular provision of the Right to Information (RTI) Act sought to be amended to remove the word ‘privacy’.
Some legal experts have also called the bill “very limited and vague” when you compare it to other privacy bills that have been passed in other countries.
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