India’s Data Breach Laws: Notification Requirements for Global Businesses

Introduction

There is a rapid increase in data breaches worldwide and India is no different. India, with its expanding tech site and wider digital economy, has brought in force a series of laws, overseeing the protection against data breaches and accountability towards such breaches. These provisions give protection only if those breaches are reported in time because, in India, omitting to report a breach can not only result in massive fines but also tarnish a corporate’s reputation. In this article, we discuss India’s data breach laws, notification requirements, and some compliance tips for safeguarding the rights of a corporate. So, whether you are a multinational company or a budding start-up, being aware of India’s data breach regime will aid you in securing your business and your clientele.

India’s Data Breach Laws: Everything You Need to Know

Companies in India that deal with sensitive personal data are governed by strong regulations to control and minimize the effects of data breaches.

Important Data Breach Laws in India

1. DPDP Act (Digital Personal Data Protection Act):
   • This law focuses on transparency and accountability in the case of data breaches involving sensitive or critical personal data.
   • It requires organizations to inform the Data Protection Board of India of a breach.
2. Information Technology (IT) Act, 2000:
   • Establishes guidelines for responding to cybersecurity incidents and punishes non-compliance.
3. CERT-In Directions, 2022:
   • Mandates organizations to report cyber incidents, including data breaches within 6 hours of discovery.

These laws will protect individual rights and reaffirm the leadership of India in the global data protection architecture.  

As an organization, you may be required to terminate the employment of an employee in the event of a major data breach. To learn more on how terminations are to be done in a legally compliant manner, read Corrida Legal’s article on Legal Guidelines on Termination of Employment in India.

Who Needs to Report a Data Breach in India?

Organization’s obligations to report data breaches in India arises from its function and responsibilities. The reporting procedure and requirements are enshrined in the CERT-In Directions, 2022.

Entities Covered Under Indian Laws

1. Data Fiduciaries:
   Organizations that decide why and how personal data is processed.
   
2. Data Processors:
   In the case of a breach, the entities that process data on behalf of a fiduciary must notify the fiduciary without undue delay.

Cross-Border Applicability

These laws are applicable to all entities responsible for the processing of data relating to Indian citizens, regardless of the physical location of the business. Multinational corporations and offshore data processing companies are also among them.

Regulatory Requirements for Data Breach Notifications in India

India’s upcoming regulatory requirements focus on transparency and timely response to reduce the impact of data breaches.

1. Timely Reporting:
   • The organizations need to inform CERT-In of any data breach within 6 hours of its detection.
   • Breaches of sensitive personal data need to be reported also to the Data Protection Board.
     
2. Comprehensive Reporting:
   • These notifications typically need to provide information about the breach, including its potential impact and measures taken to mitigate harm.
     
3. Stakeholder Communication:
   • Businesses are required to notify affected parties if the breach carries high risks to their rights or freedoms.

Meeting these standards can show compliance and help reduce regulatory fines and penalties.

How to Report on Data Breach in India

Step-by-Step Process

1. Identify the Breach:
   • Determine the type and size of the event.
   • If sensitive personal data has been compromised.
     
2. Notify CERT-In:
   • Notification needs to made along with the report with the prescribed format.
     
3. Inform Affected Individuals & organisations:
   • If the breach threatens or involves the data of individuals or organizations for which adequate reporting is required as per law, then organisations are required to inform them as soon as possible with actionable advice.
     
4. Provide Follow-Up Reports:
   • The clearest regulatory touchpoint is keeping regulatory authorities informed as investigations discover further information.
     
     

What Are the Requirements for a Data Breach Notification?

One of the most important aspects of dealing with the aftermath of a data breach is having an effective notification communication.

Key Components

1. Summary of the Incident:
   • Give a brief overview of what happened.
     
2. Details of the Breach:
   • Include details about the types of data exposed and the scope of the breach.
     
3. Potential Impact:
   • Describe how the breach might impact individuals.
     
4. Mitigation Measures:
   • Emphasize actions taken to resolve the matter and avoid it in the future.

Communicate with Clarity and Empathy: Communicate clearly and empathetically to rebuild trust with impacted individuals and stakeholders.

The Challenges Faced by Businesses Dealing with Data Breaches in India

Regulatory Complexity

The adoption of the law in India is plagued by its stringent timelines and overlap with international regulations (like GDPR), which may inadvertently contribute to confusion among global businesses operating in the Indian jurisdiction.

Operational Barriers

Because coordinating breach response across global teams is time-sensitive, language gaps can obstruct communication and slow action.

Cost of Compliance

The investment needed for implementing more advanced breach detection and incident response systems can be difficult for smaller organizations in particular.

Learnings from Actual Data Breaches in India

Case Study 1: A Multinational IT company

A ransomware attack that compromised employee data at a global IT company. Prompt reporting to CERT mitigated penalties and restored faith.

Case Study 2: Indian Financial Institution

A large bank failed to promptly disclose a phishing attack, resulting in severe financial penalties and damage to its reputation.

Takeaways:

• Timely reporting is critical.
• Regular dialogues with stakeholders mitigate long-term consequences.
  
  

What Are the Breach Notification Rule Requirements?

India’s breach notification rule requires businesses to:

1. Reporting Unauthorized Access/Use:
   • Notify CERT-In promptly.
     
2. Inform Affected Individuals:
   • Effectively convey risks and how to mitigate them.
     
3. Maintain Evidence:
   • Keep logs and records of everything for an audit or a court case.

As much as possible, avoid causing harm to the affected party.

Eligibility Of Data Breach In India

Not every incident is considered a reportable breach. The eligibility depends on:

1. Type of Data Affected:
   • Sensitive information such as health, biometrics, financial data, etc.
     
2. The severity of the Incident:
   • High-risk breaches of individuals’ rights or freedoms.
     
3. Role of the Entity:
   • Both fiduciaries and processors must report.

Knowing about breach eligibility allows businesses to properly allocate compliance resources.

How to Make Sure You Are Compliant

1. Develop a Response Plan
   • Make sure roles for breach management are clearly defined.
   • Summary of Stakeholders’ Communication Rules.
     
2. Conduct Regular Audits
   • Getting a better analysis of vulnerabilities
   • Make Improvements based on what you learn.

FAQs on India’s Data Breach

Q1. What is a data breach as per Indian law?

Data breaches do not only mean sensitive information being lost or disclosed, but unauthorized access to personal data too.

Q2. When is a data breach report necessary in India?

Data fiduciaries and processors managing Indian citizens’ data are required to report breaches.

Q3. How soon does a data breach have to be reported in India?

CERT-In is a body that mandates that breaches must be reported within 6 hours of the breach being detected.

Q4. What are the consequences of failing to disclose a breach?

Failure to comply can result in heavy financial penalties and reputational damage.

Q5. Do Indian laws apply to foreign firms?

Yes, these laws apply to global businesses processing Indian data.

Q6. What are the penalties for failing to report a data breach in India?

Failure to report a data breach in India can result in significant fines, legal consequences, and reputational damage under the DPDP Act and IT Act.

Q7. Are Indian data breach laws applicable to foreign companies?

Yes, India’s data breach laws apply to global businesses that handle the personal data of Indian citizens, regardless of the business’s physical location.

Q8. What is data breach eligibility in India?

Data breach eligibility in India depends on factors such as the nature of the data involved, the potential impact on individuals, and the severity of the breach.

Q9. What are the requirements for a data breach notification?

A data breach notification must include a summary of the incident, details of the breach, potential impacts, and mitigation measures taken to address the issue.

Conclusion

The data breach laws in India are just one piece of the larger puzzle of the developing data protection regime in the country. Understanding the data breach requirements in India and implementing robust compliance strategies can effectively navigate the complexities of these regulations. When organizations report timely and keep communication transparent, they can nip reputational risk in the bud. Corrective actions post breach can be fatal if there is no prior prepraation by an organization to tackle and report such a breach, hence take initiative now and strengthen your Data Protection framework.

About Us:

Corrida Legal is a boutique corporate & employment law firm serving as strategic partners to businesses by helping them navigate transactions, fundraising-investor readiness, operational contracts, workforce management, data privacy, and disputes. The firm provides specialized and end-to-end corporate & employment law solutions, thereby eliminating the need for multiple law firm engagements. We are actively working on transactional drafting & advisory, operational & employment-related contracts, POSH, HR & data privacy-related compliances and audits, India-entry strategy & incorporation, statutory and labour law-related licenses, and registrations, and we defend our clients before all Indian courts to ensure seamless operations.

We keep our client’s future-ready by ensuring compliance with the upcoming Indian Labour codes on Wages, Industrial Relations, Social Security, Occupational Safety, Health, and Working Conditions – and the Digital Personal Data Protection Act, 2023. With offices across India including Gurgaon, Mumbai and Delhi coupled with global partnerships with international law firms in Dubai, Singapore, the United Kingdom, and the USA, we are the preferred law firm for India entry and international business setups. Reach out to us on LinkedIn or contact us at contact@corridalegal.com/+91-8826680614 in case you require any legal assistance. Visit our publications page for detailed articles on contemporary legal issues and updates.