Big Tech Firms Clash Over India's Draft Data Protection Rules

India's proposed data protection framework has sparked a heated debate among major tech firms, including Google, Amazon, Meta and Apple, over concerns regarding consent manager frameworks and a proposed government-appointed committee overseeing cross-border data transfers.

The draft rules, released last week, establish a framework for consent managers – entities that help individuals manage their digital consent. However, industry executives have highlighted operational and regulatory challenges tied to the framework.

According to sources, major tech firms are engaging with the Ministry of Electronics and Information Technology (MeitY) over concerns regarding the proposed regulations. The draft rules empower the Data Protection Board to suspend or revoke a consent manager's registration if it deems such action necessary to protect users' interests.

Industry executives have expressed apprehensions about the proposed guidelines for significant data fiduciaries – entities collecting and processing data. They argue that the committee framework conflicts with the Digital Personal Data Protection (DPDP) Act, which does not mention such a body.

"This committee-based approach introduces unnecessary bureaucracy and regulatory overreach," an executive said.

However, the government defends the committee framework, emphasizing its necessity to address sector-specific data localization needs. Electronics and IT Minister Ashwini Vaishnaw stated that the intent is not to disrupt cross-border data flows but to cater to specific sectoral requirements where localisation is essential for citizen safety.

The government has assured that the rules complement the Act and must be read in conjunction for a holistic understanding. The committee, envisioned as a consultative body, will evaluate localization requirements proposed by sectoral ministries and engage with industry stakeholders before issuing recommendations.

While the tech giants remain cautious, seeking further dialogue to ensure the draft rules foster innovation without imposing undue compliance burdens, industry insiders warn of potential operational uncertainty and stifled innovation if the strict regulations come into effect.