India To Tighten eCommerce Data Rules

India is gearing up to put new policies on the books when it comes to eCommerce and social media and rolled out a new draft policy this weekend laying it all out.

According to a report in Reuters citing the draft policy, the proposed overhaul is focused on keeping data local, improving safeguards around privacy and putting measures in place to fight back against counterfeiting. The policies, noted Reuters, are likely to increase the costs to operate in the eCommerce sector in India. It comes a couple months after India changed its rules on foreign companies investing directly in eCommerce platforms. Those rules resulted in Amazon and Walmart overhauling their business structures in the country to comply.  “In the future, economic activity is likely to follow data,” the draft policy document said, according to Reuters. “It is hence vital that we retain control of data to ensure job creation within India.”

Under the new rules, more of consumers’ data would have to be stored locally. Last year the central bank in India started requiring payment providers Mastercard and Visa to store Indian customers’ data locally in the country. The draft policy states that steps will be taken to develop the capacity to enable data storage in the country and that the industry will have three years to adjust to the new rules governing data storage.

Additionally, Reuters reported the rules call for the creation of legal and technological frameworks to protect data as it flows across borders. The data rules would apply not only to eComemrce players, but also to social media companies operating in the country, noted Reuters. On top of all that, the report noted India is also planning on requiring all eCommerce companies to give the government access to data stored outside of the country whenever it requests such access. It also bars companies from sharing data stores outside of India with businesses even if users provide their consent.



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