India's proposed data privacy law could increase costs for companies

Multinational corporations may also have to shift their data inside the country's borders

There is also the angle of preventing companies from misusing their user data. AFP PHOTO/DIPTENDU DUTTA

Siddharth Devnani, the co-founder and partner of SoCheers InfoTech, an Indian marketing and advertising company, shares his insights on the newly proposed data protection laws.

Why is India looking at data privacy laws?

The objective looks two-fold. One is where the regulators can have access to data - and local

companies will have to oblige when they demand for this. The other is to prevent storage of private data of Indian citizens in other countries without their explicit consent. There is also the angle of preventing companies from misusing their user data.

What implications will this have for businesses?

A lot of companies, especially multinational corporations, would have to shift their data inside the country's borders, which may need changing their technical architecture and internal processes. This will further have an impact on their operating costs.

What about the impact on users?

As end-users, we would have some peace of mind, knowing that our data is unlikely to reach the hands of foreign regulators. On the flip side, it also gives an easy direct access of our data to local

regulators - which is really the point of all this.

Could this create fears about how user data might be accessed and used within India?

Smarter users are likely to get paranoid - owing to our country's track record on the topic of data security and attitude towards privacy.

What are the potential challenges?

Where AI is powering much of our digital lives today - from which posts you see on Instagram, to which credit card transactions are marked as fraud, to what jokes Siri or Amazon’s Alexa deliver on demand - it is based on the huge chunk of data the tech companies gather from millions of users across the world. Fragmenting this country-wise will hamper the ‘learning’ ability of the AI to some extent. That is if these MNCs are not allowed to send copies of Indian users' data - which is still an open question awaiting clarifications.

What impact could this have?

Smaller start-ups from the western world will be blocked-out almost entirely from entering the country where it would not be feasible for them to set up shop. We might see some of these halting their existing services in India.