PDPA 2019 is shorter and Data Localization is relaxed

The first thing we notice is that the PDPA 2019 (draft) contains 98 sections instead of 112 sections in the earlier Bill and also omits one schedule regarding the amendment to RTI.

The change regarding the data localization could be first looked at since this has been a point of concern of the industry.

Chapter VII of PDPA 2019 has two sections 33 and 34 which refer to Restriction on transfer of personal data outside India.

According to section 33:

33. (1) Subject to the conditions in sub-section (1) of section 34, the sensitive personal   20 data may be transferred outside India, but such sensitive personal data shall continue to be stored in India.

(2) The critical personal data shall only be processed in India.

Explanation.—For the purposes of sub-section (2), the expression “critical personal data” means such personal data as may be notified by the Central Government to be the    critical personal data.

This means that the provision of one copy being stored in India continues for sensitive personal data and has been removed for Non Sensitive personal data. Strict restriction for non transfer applies to critical personal data as and when notified.

Under Section 34 the transfer of sensitive personal data is subject to the following provisions such as explicit consent and intra group schemes approved by the DPA and on adequacy principle,medical emergencies etc.

34. (1) The sensitive personal data may only be transferred outside India for the purpose of processing, when explicit consent is given by the data principal for such transfer, and where—

(a) the transfer is made pursuant to a contract or intra-group scheme approved 30 by the Authority:

Provided that such contract or intra-group scheme shall not be approved, unless it makes the provisions for—

(i) effective protection of the rights of the data principal under this Act, including in relation to further transfer to any other person; and 

(ii) liability of the data fiduciary for harm caused due to non-compliance of the provisions of such contract or intra-group scheme by such transfer; or

(b) the Central Government, after consultation with the Authority, has allowed the transfer to a country or, such entity or class of entity in a country or, an international organisation on the basis of its finding that

(i) such sensitive personal data shall be subject to an adequate level of protection, having regard to the applicable laws and international agreements; and

(ii) such transfer shall not prejudicially affect the enforcement of relevant laws by authorities with appropriate jurisdiction:

Provided that any finding under this clause shall be reviewed periodically in such manner as may be prescribed;

(c) the Authority has allowed transfer of any sensitive personal data or class of sensitive personal data necessary for any specific purpose.

(2) Notwithstanding anything contained in sub-section (2) of section 33, any critical personal data may be transferred outside India, only where such transfer is—

(a) to a person or entity engaged in the provision of health services or emergency services where such transfer is necessary for prompt action under section 12; or

(b) to a country or, any entity or class of entity in a country or, to an international organisation, where the Central Government has deemed such transfer to be permissible under clause (b) of sub-section (1) and where such transfer in the opinion of the Central Government does not prejudicially affect the security and strategic interest of the State.

(3) Any transfer under clause (a) of sub-section (2) shall be notified to the Authority within such period as may be specified by regulations

The definition of sensitive personal data has also been slightly revised and the current list is as follows:

“sensitive personal data” means such personal data, which may, reveal, be related to, or constitute—

(i) financial data;

(ii)  health data;

(iii) official identifier;

(iv) sex life;

(v) sexual orientation;

(vi) biometric data;

(vii)  genetic data;

(viii)  transgender status;

(ix)  intersex status;

(x) caste or tribe;

(xi) religious or political belief or affiliation; or

(xii) any other data categorised as sensitive personal data under section 15.

Explanation.— For the purposes of this clause, the expressions,—

(a) “intersex status” means the condition of a data principal who is—

(i) a combination of female or male;

(ii) neither wholly female nor wholly male; or

(iii) neither female nor male;

(b) “transgender status” means the condition of a data principal whose sense of gender does not match with the gender assigned to that data principal at birth, whether or not they have undergone sex reassignment surgery, hormone therapy, laser therapy, or any other similar medical procedure;

It may be noted that “passwords” is no longer considered “Sensitive”. Implication of this needs to be debated since any misuse of “passwords” is an offence under Section 66C/66D of ITA 2000.

The amended provisions therefore has given up the data localization for non sensitive personal data and must be a big relief to most companies.  Social media which carry political discussions as well as names which are associated with “caste” or “Tribe” may be considered as “Sensitive” and hence fall under the restrictive category.


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