India to adopt data privacy rules.

A new law expected to be in place in India in early 2004 will provide legal safeguards to ensure data privacy protection for India and its offshore customers, including those in the United States and the European Union.

India's Ministry of Information Technology and the National Association

No U.S. law currently prohibits information such as Social Security and driver's license numbers, employment histories, and medical records from being shipped to or accessed from other countries, William Bierce, attorney and president of the New York City-based law practice Bierce and Kenerson, told CIO.com. However, U.S. companies are increasingly required to comply with industry-specific and state laws such as the Health Insurance Portability and Accountability Act (HIPAA) and the Gramm-Leach-Bliley Act.

Today, data protection provisions are usually written into India's service contracts for offshore outsourcing deals. Legal experts say India's data protection and privacy policy are critical for the country to keep the trust and confidence of foreign clients, and competition for offshore business should give the law teeth in Indian courts.