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Story URL: http://www.silicon.com/research/specialreports/offshoring/0,3800003026,39120898,00.htm

India set to strengthen data protection laws
Wants to boost confidence in offshoring

By Andy McCue

Published: Wednesday 26 May 2004

The Indian government is set to pass new legislation that will boost privacy and computer crime protection for western companies who have outsourced operations offshore.

UK firms who offshore are required to treat those operations with the same data protection and regulatory process they would if it were based in the UK. But while they are accountable to UK regulators there is currently little by the way of protection under Indian law.

Sunil Mehta, VP of Indian IT trade body Nasscom, told silicon.com in New Delhi last month that while security of data is not a problem the new law will boost confidence in the offshore market.

"There are legitimate, if misplaced, concerns about if information is safe. The UK's Financial Services Authority is increasingly aware of this and we have been able to demonstrate we have the processes in place," he said.

An Indian privacy law has been mooted for some time but it's progress through the Indian political system has always stalled. But Mehta said Nasscom has now given recommendations that have been accepted by politicians and are waiting to be passed.

"We have been able to do a gap analysis between European and Indian law on privacy and we identified exact laws that need to be changed," he said.

One of these changes includes making hacking into computer systems an offence under Indian law.

The one sticking point could be the surprise results in the recent Indian elections. silicon.com was speaking to Mehta as the elections got underway in April when the then-ruling Hindu BJP party was expected to remain in power.

But the opposition Congress alliance won after many rural and poor Indians who have not felt the benefits of the high-tech revolution voted the BJP out.

Other measures have not yet made it off the starting block, including a national register of Indian software professionals to ease the vetting and tracking of employees by firms.

Articles and commentary on IT offshoring and BPO in India and elsewhere will be appearing on silicon.com over the coming weeks. You can find them all here.