India poised to tighten data protection law

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"It is becoming extremely important for India to have in place a distinctive
legal regime promoting data protection," said Pavan Duggal, a Delhi-based
cyber law consultant. "This is necessary to create appropriate confidence
among investors and foreign companies to the effect that the data they send
to India for back-office operations is indeed safe, and there are
appropriate statutory mechanisms in place should a breach of data take
place." Opponents of offshore outsourcing to India have often cited the
absence of a data protection and privacy law in India as a strong reason for
stopping the movement of call centre and BPO work to the country. Rather
than have a separate law to deal with data security and privacy issues, the
government is considering an amendment to its Information Technology Act of
2000.  The act in its existing form only covers unauthorised access and data
theft from computers and networks, with a maximum penalty of  about
$220,000, and does not have specific provisions relating to privacy of data.
The new clauses are likely to enable the act to conform to the so-called
adequacy norms of the European Union's Data Protection Directive and the
Safe Harbor privacy principles of the US, according to NASSCOM.

Source:
http://www.computerweekly.com/articles/article.asp?liArticleID=130076