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10/16/2006
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Indian Prime Minister OKs New Data Security Laws

One proposed amendment would make companies doing business in India responsible for computer crimes committed by their employees if they're found to have lax security procedures.

Indian Prime Minister Manmohan Singh on Monday approved a set of proposals that would toughen laws designed to combat data theft and other electronic crimes in India.

The action comes in the wake of a U.K. documentary that aired earlier this month claiming India's booming outsourcing industry, which hosts sensitive technology operations for numerous Fortune 500 companies, is ridden with hackers and identity thieves.

The proposals will be presented to India's full legislature for approval during the upcoming winter session.

One proposed amendment to India's IT Act of 2000 would make companies doing business in India responsible for computer crimes committed by their employees if they're found to have lax security procedures. Another would increase fines for unauthorized disclosure of personal data from about $2,000 to about $10,000 for each instance.

Additionally, companies that are found guilty of such disclosures would be forced to pay victims of identity theft compensatory damages of up to roughly $220,000. Presently, liability for such crimes is limited to the individuals who commit them.

Executives representing India's multibillion-dollar technology and business services outsourcing industry welcomed the move but caution that it will be up to the country's courts to ensure that the new laws work to reduce data theft and other electronic crmes.

"The deterrent will come not from the new laws themselves, but when we start to see indictments and convictions," says Sunil Mehta, VP of the Indian trade group National Association for Software and Services Companies.

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