Data protection and privacy is evolving worldwide, with laws like the European Union’s General Data Protection Regulation (GDPR) setting a global standard. In India, data privacy has taken center stage with the introduction of its own data protection law, the Personal Data Protection Bill (PDP Bill). But How does India’s New Data Protection Law Differs from GDPR and What It Means for Businesses?

Data Protection Laws: A Global Trend

The need for robust data protection laws became evident in a world where personal data is an increasingly valuable commodity. GDPR, which came into effect in 2018, was a landmark legislation that aimed to give individuals control over their personal data and to simplify the regulatory environment for businesses.

India, with its vast and diverse digital landscape, recognized the importance of regulating personal data and introduced the PDP Bill. Here are the key differences between the PDP Bill and GDPR:

How India’s New Data Protection Law Differs from GDPR and What It Means for Businesses
How India’s New Data Protection Law Differs from GDPR and What It Means for Businesses

1. Data Localization:

PDP Bill: One of the most prominent distinctions between the PDP Bill and GDPR is data localization. The PDP Bill mandates that a copy of personal data must be stored within India’s borders. This requirement has generated extensive debate, with proponents emphasizing the security and sovereignty it provides. Critics, on the other hand, argue that it can lead to increased costs and challenges for businesses with cross-border data operations.

GDPR: GDPR does not impose specific data localization requirements. It allows for the free flow of data across the European Economic Area (EEA), making it easier for businesses to transfer data within this zone.

Impact on Businesses: The data localization requirement in the PDP Bill could pose challenges for businesses with international operations. They may need to restructure their data storage and transfer practices to align with this provision.

2. Cross-Border Data Transfer:

PDP Bill: The PDP Bill places strict conditions on cross-border data transfers. Personal data can be transferred outside India only if explicitly consented to by data subjects. This requirement adds complexity to international data transactions.

GDPR: While GDPR requires a legal basis for cross-border data transfers, it does not mandate explicit consent for each transfer. Instead, mechanisms like Standard Contractual Clauses (SCCs) and Binding Corporate Rules (BCRs) offer more flexible approaches.

Impact on Businesses: The PDP Bill’s consent-driven cross-border data transfer rule could require businesses to establish new mechanisms for obtaining explicit consent, potentially slowing down international data flows.

3. Applicability:

PDP Bill: The PDP Bill is applicable not only to businesses incorporated in India but also to those that conduct business in India, even if they are not physically present within the country. This broad applicability extends its impact on businesses worldwide.

GDPR: GDPR applies to businesses established in the EEA and to organizations outside the EEA that offer goods or services to, or monitor the behavior of, individuals within the EEA.

Impact on Businesses: The PDP Bill’s extensive reach implies that businesses operating in India, regardless of their physical location, must adhere to its provisions. This broad applicability can significantly impact the global business landscape.

4. Penalties:

PDP Bill: The PDP Bill outlines substantial penalties for non-compliance. Violations can result in penalties of up to four percent of the company’s global turnover.

GDPR: GDPR penalties can be as high as 20 million euros or four percent of the company’s global annual turnover, depending on the nature of the violation.

Impact on Businesses: Both the PDP Bill and GDPR have significant penalties for non-compliance. Businesses must prioritize data protection to avoid these financial repercussions.

In the End

India’s Personal Data Protection Bill and the European Union’s GDPR share the common goal of safeguarding individuals’ personal data. However, they differ in significant ways, especially in terms of data localization, cross-border data transfer, applicability, and penalties. These distinctions can have profound implications for businesses, particularly those operating on a global scale.

Understanding these differences and preparing for compliance with both sets of regulations is essential for businesses with a presence in India and the EEA. This involves not only adapting data practices but also investing in robust data protection mechanisms to ensure compliance and protect individual privacy.

Navigating the intricacies of data protection laws, whether in India or Europe, is no small feat. However, with a clear understanding of the nuances and a commitment to data privacy, businesses can thrive in the evolving landscape of data protection and privacy.