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Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021

The Government of India has recently notified the Information Technology (Intermediary Guidelines Digital Media Ethics Code) Rules, 2021 framed under Section 87(2) of the Information Technology Act, 2000 to supersede the Information Technology (Intermediary Guidelines) Rules, 2011 and govern intermediaries such as social media platforms, digital news publishers and Over-the-Top (OTT) content streaming platforms in India.

For details on its highlights, please refer to this Update. For further details, please contact [email protected].

JSA Update – FinTech

RBI’s Master Direction on Digital Payment Security Controls: Highlights and Implications

The Reserve Bank of India (“RBI”) has recently notified the RBI (Digital Payment Security Controls) Directions, 2021 (“Directions”) to ensure that regulated entities (“REs”) implement certain common minimum standards of general and specific security controls for channels such as internet banking, mobile banking and card payments.

Please refer to this Update for the key requirements set out under the Directions and their likely (indirect) implications for non-REs.

For further details, please contact [email protected]

JSA Update – Department of Science & Technology

India’s Revised Mapping Policy

Introduction

On February 15, 2021, the Department of Science and Technology (“DST”) issued guidelines on the acquisition and production of geospatial data and services, including maps (“2021 Guidelines”). The 2021 Guidelines supersede anything contrary contained in previous policies issued by the Government of India, such as certain aspects of the National Map Policy, 2005 (“NMP”), Instructions for Publication of Maps by Government and Private Publishers, 2016 (“2016 Guidelines”) and Ministry of Defence guidelines on the restriction of sale, publication and distribution of maps, issued in 2017 (“2017 Guidelines”). These changes mark a paradigm shift in India’s policies on mapping and the collection, dissemination and use of geospatial data.

We have summarised below a few of the key changes that have been introduced to India’s mapping policy by the 2021 Guidelines.

Publication and Dissemination of Maps

Previous Position:

The NMD had classified maps (in both analogue and digital form) into two categories – Defence Series Maps (“DSMs”) and Open Series Maps (“OSMs”). While the use of DSMs is controlled by the Ministry of Defence (“MoD”), the use of OSMs is mainly controlled by the Survey of India (“SOI”). The NMD also stated that if an international boundary is depicted, it would require certification by the SOI.

The 2016 Guidelines required permission or approval for the publication of all maps – Restricted and Unrestricted. It classified topographical and geographical maps of any “prohibited areas”, on a scale larger than 1:1 million, as Restricted. For this purpose, “prohibited areas” included border regions, coastal regions and outlying islands. All other maps were classified as Unrestricted. The publication of Restricted maps required permission from the MoD, and in some cases the Ministry of External Affairs. Further, certain maps, even partly covering a prohibited area, required MoD security clearance. Lastly, Restricted maps on a scale smaller than 1:4 million and Unrestricted maps required clearance from the SOI.

Current Position:

The 2021 Guidelines does away with the requirements for approvals, security clearances and licenses on the generation, publication dissemination and digitisation of maps and geospatial data. Rather than licenses and approvals, the 2021 Guidelines propose a self-certification system to ensure compliance. It also does away with a restriction of maps on prohibited areas. Instead, a ‘negative list’ will be notified by the DST, which will include attributes that will not be permitted to be marked on any map. The 2021 Guidelines provide that this ‘negative list’ will be specific to very sensitive attributes, with care taken to minimise restrictions.

The 2021 Guidelines state that all Indian entities are free to publish, distribute, update and create maps/geospatial data of any spatial accuracy, subject to the ‘negative list’.

Notably, the Guidelines prescribe a spatial accuracy threshold of 1 meter for horizontal and 3 meters for vertical. Maps/geospatial data with spatial accuracy finer than the threshold must be owned by Indian Entities and stored in India. Foreign companies and foreign owned or controlled Indian companies can license such maps, for the purpose of serving Indian customers. However, this access must be restricted through APIs that do not allow such maps/geospatial data to pass through the licensee or its servers.

Based on our discussions with stakeholders, we note that for most purposes, including turn-by-turn navigation, most companies and customers don’t require maps that exceed the abovementioned accuracy thresholds. Consequently, foreign-owned applications and products that utilise such maps would be in compliance with the 2021 Guidelines.

Access to Geospatial Data

Previous Position:

The 2016 Guidelines also required a license to be issued from the SOI for publication of maps using SOI map data. Before publication, the publisher was also required to obtain specific clearance from the MoD. Similarly, if the data contained information on India’s external boundary or coastline, certification from the SoI was required. Licenses were also required for publication of SOI map data on the internet, with specific categories of licenses being issued for different use-cases. The Remote Sensing Data Policy, 2011 also had license requirements for access to remote sensing data.

Current Position:

In contrast, the 2021 Guidelines state that all geospatial data collected using public funds, except classified data, shall be made available to all Indian Entities without restriction, at a fair and transparent price. The 2021 Guidelines further instruct the SOI and other government agencies to take immediate measures to simplify procedures, abolish licences and use modern techniques to make their data accessible online.

Collection and Generation of Geospatial Data

Previous Position:

Previous policies placed considerable restrictions on the ability of companies and individuals to collect or generate geospatial data. For instance, the Remote Sensing Data Policy, 2011 mandated a license and permission from the Government for operation of a remote sensing satellite from India.

Current Position:

The 2021 Guidelines state that Indian entities are free to acquire, collect, generate, prepare, digitize and create geospatial data of any spatial accuracy within India, using any “Geospatial Technology”, subject only to the regulations on attributes on the ‘negative list’. Geospatial Technology is defined as any technology including aerial/UAV photogrammetry, aerial/UAV LIDAR, drones, radar interferometry, street view, satellite based remote sensing, AI, underwater mapping etc. This is a complete departure from previously existing norms. This liberalisation of the use of geospatial technologies in India will facilitate accurate, high resolution 3-D mapping of the country. This could pave the way for previously unseen technology and use-cases in the domestic market.

For more details, please contact [email protected]

Women Employment, Pandemic – Budget 2021

The Budget 2021-22 has covered welfare scheme for women plantation workers in Assam and West Bengal, the reduced margin money requirements from 25% to 15% under the scheme of Stand Up India and permission to work in all sectors and also in night shifts with more security. However, these measures will have limited contribution for women who are worst hit by the pandemic. Practically, the women entrepreneurs, domestic helps in cities, at construction sites, and in handicraft and retail units needed a boost and some incentives. Data show that more than eight months after the pandemic, 13% fewer women than a year ago were employed or looking for jobs, compared to 2% fewer men!

Quote by Rupinder Malik on Women Employment, Pandemic – Budget 2021 published in Mondaq.

Fintech – Budget 2021

Roadmap for revival of the economy from the pandemic laden year of 2020-21 has been dealt holistically by Budget 2021-22. The 2-step, short-term – long-term revival approach, countering the healthcare concerns and simultaneously concretizing the self-reliant India goal is a welcomed note in the 3rd Sitharaman budget. The Sunrise ‘Fintech’ Sector has garnered heightened reliance by the industries and consumers alike. While the ‘FinTech’ tab on the main page of RBI was a move towards recognizing the importance of the new-age sector – the announcement of developing a Fin-Tech hub will give the fintech players an added participating impetus. Adding to the impetus is the INR 1,500 crore allocation to give a push to the developing digital payments infrastructure. The regulatory sandbox incentives coupled with the promising tone of the budget towards the sunrise sector shows a lot of scope for India to become a major player in the fintech industry over the globe.

Quote by Sidharrth Shankar on Fintech – Budget 2021 published in Mondaq.

Healthcare Sector – Budget 2021

The experiences of Covid-19 have delineated the importance for emerging economies to invest in healthcare infrastructure at all levels – primary, secondary and tertiary. The budgetary announcements of the outlay of INR 64,180 crore under the Aatmanirbhar Swastha Bharat Yojana have hit the bulls eye in this area. The approach followed by the Indian government is a marked departure from existing practices of reduction of out-of-pocket expenditure of the citizens.

Quote by Sidharrth Shankar on Healthcare Sector  – Budget 2021 published in Mondaq.

Transport sector – Budget 2021

Monetization of dedicated freight corridor after commissioning will induce not only operational efficiencies but also the desired level of liquidity for expanding and increasing the pace of rollout of DFC corridor and effectiveness of India’s logistics and transport sector.  Such asset monetisation will attract both, domestic and international investors, if its underpinned by an effective institutional and regulatory framework for DFC corridor. National Asset Monetisation pipeline coupled with focus on infrastructure spending – especially roads, ports and airports and railways, with conciliatory mechanism for dispute resolution in contracts with PSU will catalyse investments in the infrastructure sector, and put the economy on high growth plan and give the economy the required push.

Quote on Transport sector – Budget 2021 by Vishnu Sudarsan published in Mondaq.

Decriminalization under the LLP Act, 2008 – Budget 2021

On corporate governance front, we were expecting the decriminalization under the LLP Act, 2008 and this is a good move to ease the doing of business in India. To relax the compliance burden, the definition of Small Companies is expanded by increasing the thresholds for paid-up capital from ‘not exceeding INR 50 Lakh’ to ‘not exceeding INR 2 Crore’ and turnover from ‘not exceeding INR 2 Crore’ to ‘not exceeding INR 20 Crore’. Further, the Government seems to incentivize the start-ups by allowing One Person Companies (OPCs) to grow without any restrictions on paid-up capital and turnover; the residency limit to set up an OPC is reduced from 182 days to 120 days and Non Resident Indians are permitted to incorporate OPCs.

Quote by Rupinder Mailk on Decriminalization under the LLP Act, 2008 published in Media Brief, Mondaq and Connexionblog.

Union Budget Proposals, 2021

When Hon’ble Finance Minister rose to present the Union Budget for the fiscal year 2021-22 (“Budget”), she had a humungous task at hand. An economy which was already crippled by a global slowdown, got further pushed into an unprecedented crisis due to COVID-19 and the lockdowns.

The Budget rests on six pillars, namely, health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance. Tax proposals contained in the Budget are in line with these objectives and give fillip to domestic manufacturing to meet the vision of ‘Aaatmnirbhar Bharat’ and ‘Make in India’.  

For a snapshot of the key tax proposals under the Budget, please click here.

This Budget Update has been prepared by the JSA Tax Team (Direct and Indirect Tax). For further details, please contact [email protected]

JSA Viewpoint – Aviation sector, Budget 2021

Finance Minister  Nirmala Sitharaman while presenting the Union Budget for 2021-22 as part of the tax incentives to International Financial Services Centre (IFSC) in GIFT City has proposed  tax holiday for capital gains for aircraft leasing companies and tax exemption for aircraft lease rentals paid to foreign lessors.

This move can be considered to be a first step towards creating a domestic aircraft leasing hub in India, since till now, the Indian aviation industry has been dominated by lessors from Ireland, Dubai and Hong Kong due to their attractive tax policies. This move is likely to incentivise leasing companies to set up operations here in the GIFT city and making it a global hub. However, as seen from the past experience from around the world the results may be not be as immediate as expected, Ireland took almost 40 years to be the world’s top aircraft leasing hub. Singapore, too, has invested time and money attracting lessors. Along with providing tax incentives, the government will also need to amend regulations and alter double tax avoidance treaties with other countries to make aircraft leasing business in India a reality. Though tax incentives is a good step towards building this segment in India, the government will need to create a regulatory framework with proper financial structuring so that it could also encourage deep pocketed domestic investment in aircraft leasing business.

JSA Viewpoint by Poonam Verma.