India clarifies data security rules for BPO industry

India clarifies data security rules for BPO industry

Many Indian companies are breathing a sigh of relief this week following the government's announcement that new rules for data security would not apply to their businesses, the Economic Times reported.

The massive business process outsourcing industry in India had been worried that the IT Act of 2008 meant that non-electronic, written permission had to be obtained before any sensitive data could be shared with them for processing. Companies like medical records transcription firms and financial services conglomerates would have seen their operations slow to a crawl if the decision had gone the other way, according to the newspaper.

"The government this week issued a clarification stating that BPOs located in India will be governed only by specific contracts signed with their global and Indian customers," the Economic Times said.

Industry groups were quick to applaud the move, with NASSCOM spell out president Som Mittal saying in a statement that "the rules issued recently had created possible interpretation issues for outsourcing companies, and we thank the government for their support in issuing the necessary clarifications."