Skipping This Could Cost Indian Firms Their EU Market Edge: GDPR Explained

The General Data Protection Regulation (GDPR), informally known as Regulation (EU) 2016/679, is the European Union regulation governing the personal data processing. Despite its EU enactment, it is of much broader applicability not just to Europe alone but to global companies everywhere since its extraterritorial application (Article 3) applies to those companies whenever they process the data of EU nationals. Since the companies in the sector as an Indian IT service provider, exporter, and SaaS provider are more ready to serve European customers, the government in question has prompted the implementation of the GDPR compliance, which is no longer a compulsory action in the market entry, but rather a legal necessity.This report presents an organized introduction to GDPR, also examines its impact on Indian companies and reflects on several of the pillars of compliance with particular attention paid to Standard Contractual Clauses (SCCs)-the main tool that allows legal cross border transfers of data between the EU and India.

Overview Of GDPR

The GDPR regulates the way and means of personal data collection, processing, storage and sharing. Art. 4 presents all personal data (i.e. names, identifiers, IP addresses, location data, etc.) as a broad definition. The Regulation provides fundamental guidelines on the legal handling such as limit of purpose, minimisation of the data, data integrity and data accountability (Art. 5).

More importantly, in Article 3, the GDPR is relevant to non-EU organisations provided that they

• Sell goods or services to a person(s) within EU (irrespective of whether payment has been made); or

• Track the behaviour of EU people (e.g. cookies or analytics).

  
  

According to the European Data Protection Board (EDPB), non-EU companies that do not have a physical presence in the European Union but are still involved in activities willingly target EU citizens are also subject to GDPR (EDPB, 2018).

Main Obligations of Indian Companies 

Although GDPR consists of 99 Articles, three compliance pillars are notable in the case of Indian entities:

1. Lawful Basis & Transparency

   Article 6 necessitates a lawful basis of every processing operation, i.e., consent, performance of a contract or a legitimate interest. Firms should keep a clear privacy statement describing the purpose of processing and times of retention (Arts. 12-14).

2. Data Subject Rights

   The Indian companies should allow the EU individuals to use the rights of access (Art. 15), rectification (Art. 16), erasure (Art. 17), and portability (Art. 20). The turnover of such requests is usually in 30 days.

3. Organisational Measures and security.

   Technical safeguards necessary to risk under GDPR (Art. 32) would also involve encryption and breach notification procedures. Businesses need to have internal records to show that they were compliant (accountability principle, Art. 24).

Transfers of Data Across Borders: Role of SCCs

As India is not a country which has an adequate decision of the European Union, the transfer of the personal data outside the European Union to India is limited by Chapter V of the GDPR. This regulatory gap is of paramount importance to Indian companies, whose most urgent action is to eliminate this regulatory gap through Standard Contractual Clauses (SCCs).

What are SCCs?

SCCs are standardized contractual models, which have been adopted by the European Commission (Implementing Decision (EU) 2021/915). They bind the data importer legally not of EU citizens to higher data protection standards of EU (European Commission, 2021).

Indian IT companies, BPOs, and cloud service providers, as the main parties to sign the SCCs, are the main legitimate method to get the data of clients in the EU. All of EU-India service contracts with the personal data processing should include these clauses.

Strategic Impact (Beyond Compliance)

While compliance is mandatory, adopting GDPR standards offers Indian firms distinct strategic advantages that go beyond avoiding penalties:

• Competitive Differentiation through "Trust Premium": As much as compliance is a bottom line, proactive data governance is a strategic option. Indian companies that willingly implement enhanced privacy standards (such as ISO 27701 in line with GDPR) might be instilled in the position of low-risk partners. This will enable them to compete not only by cost (arbitrage) but by trust, securing premium deals in considered fields such as healthcare, fintech, and R&D where data security is the number one priority.

  
  

• Supply Chain Integration & "Frictionless" Trade:  With SCCs and privacy-by-design integrated into normal operating processes, the Indian vendors could reduce their sales cycles. When outsourcing to Europe the internal compliance bottlenecks are also a cause of problems; by contracting with an Indian vendor whose compliance structure has long been approved the bottlenecks can be eliminated and they become a better choice as a strategic partner than other non-adequate jurisdictions.

  
  

• Future-Proofing for the India-EU Digital Corridor: Strategically, preparation to align with GDPR will equip Indian companies to soon face the India-EU Free Trade Agreement (FTA) as well as national Digital Personal data Protection (DPDP). Organizations that align themselves to EU standards today are literally mobilizing their business models to be future friendly such that when the regulatory winds blow they may still be business centres of efficient data processing in the world.

  
  

Conclusion

Indian companies that are a part of the EU digital economy cannot remain GDPR-adherent without being required to do so. Knowing extraterritorial scope, honoring data subject rights, and strictly adhering to Standard Contractual Clauses (SCCs), Indian companies will be able to change their vision of GDPR as a compliance expense, and use it as a source of competitive advantage in establishing trust in the India-EU bridge.

This article is written by

Arpan Saroda, EICBI Public Policy & International Affairs Intern

References

1. European Commission. (2016). Regulation (EU) 2016/679 of the European Parliament and of the Council (General Data Protection Regulation). EUR-Lex. https://eur-lex.europa.eu/eli/reg/2016/679/oj/eng

   
   

2. European Commission. (2021). Commission Implementing Decision (EU) 2021/915 — Standard Contractual Clauses for international transfers of personal data. EUR-Lex. https://eur-lex.europa.eu/eli/dec_impl/2021/915/oj/eng

   
   

3. European Commission. (n.d.). What is the European Data Protection Board (EDPB). https://commission.europa.eu/law/law-topic/data-protection/rules-business-and-organisations/enforcement-and-sanctions/enforcement/what-european-data-protection-board-edpb_en

   
   

4. European Data Protection Board. (2018). Guidelines 3/2018 on the territorial scope of the GDPR (Article 3). https://www.edpb.europa.eu/our-work-tools/our-documents/guidelines/guidelines-32018-territorial-scope-gdpr-article-3-version_en