Perspective on how a robust business or aggregate data policy can enable Indian startups

10th September 2019, New Delhi: In February this year, the Government of India via DPIIT unveiled a draft of the ecommerce policy that would govern the working of the ecommerce sector in India. The draft ecommerce policy also has an extensive data section with its application to businesses in not just the ecommerce space but also social media, cloud computing and technology. Startups and SMEs have actively been discussing the proposed data rules in the various circles on LocalCircles this year have given many inputs so far.

Majority of the 6,000 startups and entrepreneurs that participated in the survey conducted on the subject were in favour of India having a separate business or anonymised data policy, different from the ecommerce policy. With the recent media reports, some degree of confusion has gotten created as to which ministry is the owner of this subject on a going forward basis. Some of the key inputs of startups in regards to how business, aggregate or anonymised data should be viewed, are detailed in this document.

Sharing of aggregate data by Government and Corporations

India’s business or anonymised data policy must be such that it enables Indian startups to benefit from aggregate data of government, communities and large corporations. A startup social responsibility program may be considered where every large corporation operating in India and above a certain revenue and profit threshold must be required to share aggregate data sets from the industry they operate in such that the up and coming companies i.e. startups can benefit from these insights and be able to develop more targeted products and services and tap into the right markets. For example, an ecommerce site sharing the number of search queries received in an year for a temperature controlled coffee mug which is not available in India scopes the opportunity for a startup that may be piloting such a product and will enable them to build an accurate business plan with higher probability of success and funding.

Sharing of aggregate data with overseas entities

On the data sharing front, it is important to understand that many startups operate in new areas and bring about an innovation in product, technology intervention or service and many of the cutting-edge technologies are still developed overseas. As a result, many startups need access to overseas resources, expertise, tools and capital because not all of them are available in India. Therefore, an Indian startup may need to open an office overseas and hire resources there to develop their product or service and in many cases will have a need to share aggregate data between resources and legal entities. Therefore, it is imperative that aggregate data of Indian startups be permitted to be shared with atleast group companies they have overseas. Similarly, if a foreign company acquires an Indian startup, they may have plans to take the product/service developed by the startup and scale it further globally and hence would require access to aggregate data of the startup.

Government access to aggregate data and algorithms of businesses

On the subject of the Government’s rights over the aggregate data of businesses, this should only be permitted in the event of a law-order, investigation or enforcement situations. For routine matters, Government should not have access to neither the aggregate data nor the algorithms used by a business as such an access can be easily misused or compromised. Businesses spend significant amounts of resources to collect data, build products and services and a market and for many businesses aggregate data is the core of it and they must protect it to protect their value proposition and the business itself.

LocalCircles had shared this feedback with DPIIT in Ministry of Commerce earlier this year and is now sharing the same with leadership team of Ministry of Electronics and Information Technology (MEITY) and hopes that as the Government puts together the core aspects of an anonymised/aggregate data policy of India, the above recommendations will be kept in mind.