The Indian government issued new privacy rules last months that apply nationwide, including the entire outsourcing industry. Does this lead to a future with lesser data fraud, fewer security threats and reduced cybercrime? This blog entry highlights how India’s IT companies are from now on forced to tighten the data security belt.

Since April this year, Indian organizations are pressured to renew their strategies when it comes to client information confidentiality and private data security. Worldwide, technological trends such as cloud computing and open source are causing market experts, IT service buyers as well as providers to reassure better privacy regulations.

Already last month, India reacted and imposed new, stricter privacy rules on the nation’s IT service providers. The new regulations imply serious, tougher limitations on how organizations operate with their clients’ data. The Privacy Rules 2011, an extension to India’s already existing 2008 IT Security Act amendment, are therefore implemented nationwide and are, from now on, effective.

According to the new laws, companies need to notify each and every individual, whose data they collect via e-mail, letter or fax. In order to secure personal information, every IT company further needs to implement certain standards that meet the law’s requirements.

According to officials, it is not foreseeable how well companies adopt the new rules and adjust to them. A widespread, successfully adoption also depends on how authorities enforce the laws.

In fact, the entire Indian IT outsourcing industries is likely to be affected by the new regulations and IT service buyers might significantly benefit from improved security standards. Greater security and data confidentiality might generally attract a bigger amount of foreign clients, especially those who decided against outsourcing in the past due to security concerns.