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Indian Data Protection Law Encourages Outsourcing

India’s data protection law, which came into force in February 2009, is already beginningto show its effectiveness according to PavanDuggal, an Indian legal expert. Duggal told the annual international Privacy Laws & Business conference in Cambridge that the act, known as the Information Technology Amendment Act 2008, was starting to ‘flex its muscles.’ He added: “The law encourages more outsourcing of high end operations to India. The legal regime now in place in India to deal with data protection will increase confidence. Effective civil and criminal remedies provided for under the act enhance the comfort factor of corporate organizations which can resort to these remedies.”

The law means that companies outsourcing work to India must ensure that their serviceproviders comply with the requirements of the Act. Companies who set up, or who havededicated outsourcing units, must also ensure that these units comply with the amended Act.Breach of the Act is now a crime punishable by a fine of INR 50 million and imprisonment.MrDuggal said: “For companies doing business in and with India the new law is a breath of fresh air. How the law is implemented will determine its efficacy.”

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