IT industry players have appreciated the government's move to withdraw the personal data protection bill and have sought participation in the consultation process for the fresh draft.

The industry was critical of the data protection bill tabled in Parliament by the Joint Committee on Personal Data Protection Bill.

The Joint Committee on Personal Data Protection Bill, 2019, headed by BJP member P P Chaudhary had tabled its report in Lok Sabha on December 16, 2021 which had a number of different points than the draft protection data bill (PDP) Bill prepared by the Ministry of Electronics and IT.

The government on Wednesday withdrew the Personal Data Protection Bill from Lok Sabha and said it will come out with a "set of fresh legislations" that will fit into the comprehensive legal framework.

US-based ITI, whose members include all IT majors like Google, Meta and Amazon, appreciated the government's move to withdraw the Parliamentary panel version of the bill. "ITI welcomes Meity's plan to implement a robust stakeholder consultation as it reconsiders a comprehensive legal privacy framework for the digital ecosystem. ITI participated in all consultative processes during the framing of the PDP bill 2019 and are eager to continue our engagement.

"We are certain that the government will consider all the views once the consultation on the framework begins and look forward to participating," ITI country manager for India, Kumar Deep said.

ITI was among global industry bodies that had opposed the joint committee version of the bill. Such global industry bodies included JEITA, TechUK, US India Business Council, and Business Europe which represent thousands of companies and technology majors like Google, Amazon, Cisco, Dell, SoftBank and Microsoft.

Around a dozen of industry bodies had written to the Union IT and telecom minister Ashwini Vaishnaw that implementation of the proposed Data Protection Bill, as recommended by a Parliamentary panel, will significantly degrade India's business environment and reduce foreign investment inflows.

Meta in regulatory filing in February had said that proposed data protection bills in countries such as India, are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.

"New legislation or regulatory decisions that restrict our ability to collect and use information about minors may also result in limitations on our advertising services or our ability to offer products and services to minors in certain jurisdictions," it had said.

Internet Freedom Foundation (IFF) said that the bill has been withdrawn after four years of deliberations.

"We are cautiously watching these developments & hope the Ministry will use this opportunity to address the numerous criticisms of the bill made by various stakeholders during the consultation process," IFF said.

According to IFF, the Data Protection Bill 2021, which should empower the user with rights surrounding their own personal information, had failed to prioritise the user and instead, benefits the government and large corporations way more than it benefits users.

In a paper, IFF had said that the bill gives large exemptions to government departments, prioritises the interests of big corporations, and does not adequately respect people's fundamental right to privacy.

"This move, when taken with the lack of literacy around data protection in India, may be dangerous on an individual level - where your everyday privacy is threatened - and on a collective level, given how it makes allowances for mass surveillance," IFF had alleged.

Cyber security company Voyager Infosec director Jiten Jain said that the government's move to withdraw the bill shows that it is well aware of concerns raised by some sections of the industry and civil societies.

"We expect the new version of the bill will be comprehensive and allay all major concerns that have been raised by the stakeholders.

However, the government should move quickly with the fresh version of the bill because we cannot allow foreign companies to take our citizen's data for a ride," Jain said.