India is increasingly asserting its influence in the digital realm, actively shaping new regulations and frameworks to govern the rapidly evolving digital space. This proactive approach, as discussed in a recent episode of the "Morning Brief" podcast by The Economic Times, raises important questions about the motivations and potential consequences of these new rules.

One of the key areas of focus is digital competition. The proposed Digital Competition Bill (DCB) aims to shift the regulatory landscape from ex-post litigation to ex-ante guardrails for "systemically significant" platforms. This means preemptively setting rules to prevent anti-competitive practices such as self-preferencing, data misuse, coercive tying, and blocking interoperability. The Competition Commission of India (CCI) would oversee the enforcement of these regulations. While the intent is to foster fair competition, some experts suggest that India should first assess the effectiveness of the 2023 Competition Act amendments and build sufficient capacity before introducing new legislation. Kazim Rizvi, Founding Director of The Dialogue, a public policy think-tank, argues that the CCI's handling of the Google Android TV matter demonstrates that ex-post measures can be effective with adequate resources. Furthermore, data from The Dialogue's survey of MSMEs indicates that these new rules might inadvertently hinder the growth of Indian digital-first companies.

Data protection is another critical aspect of India's evolving digital regulatory landscape. The Digital Personal Data Protection (DPDP) Act, 2023, which received presidential assent on August 1, 2023, represents a significant step towards establishing a comprehensive data privacy framework in India. Inspired by the core principles of the European Union's General Data Protection Regulation (GDPR), the DPDP Act regulates the processing of digital personal data and permits cross-border data transfer unless explicitly restricted by the Indian government. This Act marks a shift from earlier drafts that proposed stringent data localization mandates. The Supreme Court's landmark K.S. Puttaswamy v. Union of India (2017) judgment, which recognized privacy as a fundamental right, laid the groundwork for this legislation.

In addition to competition and data protection, India is also focusing on enhancing digital connectivity and infrastructure. The Telecom Regulatory Authority of India (TRAI) has introduced a manual to assess digital connectivity in properties, aiming to standardize the evaluation of buildings for high-speed, reliable digital access. This initiative is particularly relevant given that over 80% of mobile data is consumed indoors, and modern building materials often weaken 4G and 5G signals. By integrating robust in-building networks from the design and construction stage, developers can improve consumer experience and overall quality of service.

Furthermore, India is revamping its digital payment regulations with the introduction of a new Payments Regulatory Board (PRB). This board, replacing the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), involves joint oversight by the Reserve Bank of India (RBI) and the central government. Given India's significant share of global real-time digital payment transactions, this move aims to foster innovation while managing systemic risks. The PRB is expected to encourage policy alignment, support the adoption of new payment methods, and enhance interoperability in the digital payments ecosystem.

These new rules and regulations reflect India's ambition to create a well-governed and thriving digital economy. By proactively addressing issues such as competition, data protection, connectivity, and payment systems, India seeks to balance innovation with consumer protection and security. However, it is crucial to carefully consider the potential impact of these regulations on domestic businesses and ensure that they do not inadvertently stifle innovation or create undue burdens. As India continues to shape its digital landscape, a collaborative approach involving government, industry, and other stakeholders will be essential to achieving a balanced and sustainable digital ecosystem.