Right to Privacy Ruling Impacts Aadhaar, FDI Restrictions for Power Grid, Telecom – India Regulatory Brief

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Supreme Court rules individual privacy as fundamental right

On August 24, the nine-judge bench of the Supreme Court (SC) of India upheld the right to individual privacy as a fundamental right under the Constitution.

The landmark verdict came on an array of petitions challenging the federal government’s move to make Aadhaar mandatory for availing benefits of various government schemes, and extending its provisions for several other essential activities, such as opening bank accounts, making financial transactions above US$780 (RS 50,000), securing loans, and filing tax returns.

Though the SC ruling does not overturn the constitutional validity of Aadhaar Act, it will play an important role in a separate court hearing that will examine the validity of Aadhaar on the principles of the right to privacy. Separately, the judgment does not have a direct or immediate effect on data sharing as India does not have a data privacy law. However, the decision does provide solid grounding for any future data privacy policies in India.

The impact of the SC ruling is evolving. Businesses should monitor the issue closely to understand how it impacts Aadhaar-related transactions, as well as data privacy rules.

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India bans gold exports above 22 carats 

The government announced a ban on gold exports above 22-carat purity level in a bid to check illegal trade practices, such as ‘round-tripping’. Round -tripping allows a trader to import gold products at a lower import tax from countries that have trade agreements with India, and re-export the same without any value addition. The announcement came in form of an amendment to 2015-2020 foreign trade policy.

The notification states that export of gold jewelry, plain or studded, and articles containing gold of eight carats and above, up to a maximum limit of 22 carats, would be allowed only from certain areas. These areas include domestic tariff areas and export-oriented units, electronics hardware technology parks, software technology parks and bio-technology parks. The ban will affect prices of gold products, including partly processed jewelry, coins, and medals in India.

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India tightens FDI rules for power, telecom

The Indian government has announced stricter provisions for businesses invested in power and telecommunications.

According to new provisions, companies must detail their source of raw materials for transmission systems in the power sector. If the material sourced to India is found to contain any form of malware, the government can restrict its operations in the country. Chinese firms such as Harbin Electric, Dongfang Electronics, Shanghai Electric and Sifang Automation either supply equipment or manage power distribution networks in 18 cities in India.

Similar steps have been taken on the telecom sector, demanding high-security standards in areas that are dominated by Chinese makers of equipment and smartphones. Last week, the Ministry of Electronics and Information Technology asked 21 smartphone makers, mostly Chinese, to provide details about the safety and security practices, guidelines, and standards followed in their product or services sold in India.


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