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Cloud computing allows users to access and work with data storedon remote networks. The client side front end infrastructure(laptops/desktops, etc.), connect to backend cloud storage,applications, and services that may be hosted in cloud farms orserver farms across the world. The growth of high speed Internetaccess and advances in data storage and retrieval technologies hasled to cloud computing becoming the service model of choice forboth business critical services, like banking and payments, as wellas non-critical ones like online gaming.

Since late 2019 Indian regulators are, once again, examining theneed to regulate the cloud. This State of Play update examines theregulations currently applicable to cloud service providers inIndia, and how the local regulatory landscape is evolving.

There is no overarching law at present on providing cloudservices in India. No local license is needed to provide cloudservices, specifically. Cloud services can be provided in India ona cross-border basis. A foreign cloud service provider is notrequired to incorporate a local entity, procure any operationallicenses, appoint local employees, etc., to offer cloud services tocustomers in India. There is also no restriction or foreigninvestment for setting up cloud operations in India.

A locally incorporated cloud service provider, would be subjectto compliances under Indian law pertaining to corporate matters,tax, labour, etc. These licenses/ compliances are linked to theday-to-day operations of Indian companies and not specifically tothe provision of cloud services. In addition, even an offshorecloud services provider is subject to data privacy and accesscompliances, as shown below.

Indian and foreign cloud service providers are subject tocompliances under the Information Technology Act, 2000("IT Act") and corresponding rules ondata privacy and law enforcement access.

Originally published November 1, 2020

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Data Protection refers to the set of privacy laws, policies and procedures that aim to minimise intrusion into one's privacy caused by the collection, storage and dissemination of personal data. Personal data generally refers to the information or data which relate to a person who can be identified from that information or data whether collected by any Government or any private organization or an agency.

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Cloud Computing In India - The State Of Play And What's Next - Privacy - India - Mondaq News Alerts