Exemptions for Startups in Personal Data Protection Bill Aim to Simplify Compliance
The Indian government has assured that exemptions provided to startups in the Personal Data Protection Bill will only facilitate easier compliance with the proposed legislation. Minister for Electronics and Information Technology, Ashwini Vaishnaw, addressed concerns regarding potential misuse of personal data by startups during a parliamentary session on August 9. The bill was subsequently passed by the Rajya Sabha and awaits the President’s assent to become law.
According to a copy of the bill, the Central government reserves the right to grant exemptions to specific classifications of data fiduciaries, including startups. These exemptions include waiving the requirement for platforms to notify users about the type of personal data being processed and the purpose for which it will be used. Additionally, startups may be exempted from ensuring the completeness, accuracy, and consistency of the data they handle if it pertains to a user and is shared with another data fiduciary.
During parliamentary discussions on the bill, Amar Patnaik, a member of the Biju Janata Dal, suggested that exemptions could be granted to startups to reduce their compliance costs. However, he emphasized that integrity and completeness of data should not be compromised. Echoing this sentiment, S Niranjan Reddy of the Yuvajana Sramika Rythu Congress Party warned against potential misuse of exemptions by so-called data mining startups, which could exploit relaxed regulations to collect and exploit user data for ulterior motives.
Minister Vaishnaw clarified that exemptions for startups would only relate to compliance with the law, not to the violation of its fundamental principles. He explained that these carve-outs would enable the creation of a regulatory sandbox, providing platforms an opportunity to develop and test their products. Once the product has been validated within the sandbox, the full extent of the law will apply.
As the Personal Data Protection Bill progresses, the government aims to strike a balance between facilitating innovation and safeguarding individuals’ data privacy. The exemptions for startups are intended to simplify compliance processes and support the development of new products while ensuring that the core principles of data protection are upheld. By creating a fair and conducive regulatory environment, India seeks to nurture its startup ecosystem while safeguarding user privacy and data integrity.
