Personal data sent to India by customers outsourcing IT work there will not be covered by India\u2019s new privacy rules, the government announced in late August. The clarification was a huge relief to India\u2019s large outsourcing industry.\n \n The data privacy rules, issued in April, require companies or their intermediaries to get written consent from individuals about the use of the sensitive personal information they collect. But it would have been very difficult for Indian outsourcers to operate if they had to get written consent from every foreign citizen whose personal data moves through India\u2019s vast collection of call centers and other outsourcing operations.\n \n India\u2019s Ministry of Communications and Information Technology issued a clarification saying the new rules apply only to Indian companies that collect information from individuals. That ended confusion over whether U.S. and European companies sending data for processing to Indian outsourcers would have to follow India\u2019s privacy rules while collecting data in their countries.\n \n The rules define \u201csensitive data\u201d as including passwords, financial information, medical conditions, sexual orientation and biometric information.\n \n It is now clear that it is the companies collecting and sending the data\u2014not outsourcers\u2014that are responsible for protecting the privacy of the data according to the rules of the countries they operate in, says Kamlesh Bajaj, CEO of the Data Security Council of India. The council was set up by India\u2019s National Association of Software and Service Companies to set standards for data security and privacy for outsourcers.\n \n However, the preferential treatment given to outsourcers could be struck down in court, says Pavan Duggal, a cyberlaw consultant and advocate in India\u2019s Supreme Court. The clarification has not been issued under any provision of the country\u2019s IT Act, and in fact violates the spirit of the IT Act, which does not limit the jurisdiction of its laws to companies within India, Duggal says.\n \n The clarification is also vague and could lead to a variety of companies claiming to be exempt from the personal data rules, he adds.