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Finance Ministry seeks to remove data protection from e-commerce policy

May 14, 2019 by The Passage Team
Finance Ministry seeks to remove data protection from e-commerce policy

The Indian finance ministry has suggested that provisions on data protection be excluded from the national e-commerce policy on grounds that the issue is best handled by the IT ministry, Mint reported.

A source told Mint that the draft data protection bill, being dealt by the IT ministry, is not restricted to e-commerce companies but is applicable for every industry and sector. “It is best if the issue is not a part of the e-commerce policy," the source said.

The e-commerce policy, being prepared by the department for promotion of industry and internal trade (DPIIT), was expected to contain guidelines on the use of personal data of customers and data generated by companies.

The IT ministry is preparing a draft data protection bill, which will contain provisions to protect individual privacy.

The DPIIT issued the draft e-commerce policy in February and asked various ministries and stakeholders to send their comments by 29 March. According to the official cited above, the finance ministry has conveyed its reservations through its comments.

The policy is expected to be finalised once a new government takes office. The policy draft aims to develop a regulatory and legal framework to ensure consumer protection, data privacy and a level playing field for all.

The draft says, among others, that data collected within India belongs to the citizens and should be used for the nation’s development, and such data generated by e-commerce platforms, social media and search engines should reside within the country. It also says that if an entity collects or processes any sensitive data in India and stores it on an overseas server, then “all such data stored abroad shall not be made available to other business entities outside India, for any purpose, even with the customer consent".

Besides, data should not be made available to a third party, including a foreign government, even with customer consent. However, if required, the Indian government may seek access to data stored abroad. There is no restriction on cross-border flow of data if it is not collected in India.

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