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The Indian parliament enacted the Information Technology Act in 2000, legalizing digital signatures on most commercial agreements and contracts and creating mechanisms to prevent identity theft and fraud during digital transactions. The act was based on the United Nations Model Law on Electronic Commerce. An amendment in 2008 added tougher penalties for companies that fail to provide adequate security for a consumer’s identity. The act also created government bodies to anticipate new challenges to the law.
The Information Technology Act of 2000 was enacted by the Indian parliament to update the nation’s approach to online transactions. This legislation led India to agree to a United Nations (UN) resolution passed in 1997 called the Model Law on Electronic Commerce. One of the main provisions of the Information Technology Act is the legalization of digital signatures on most commercial agreements and contracts. The Indian parliament has also created mechanisms to prevent identity theft and fraud during digital transactions. An amendment in 2008 added tougher penalties for companies that fail to provide adequate security for a consumer’s identity.
The Model E-Commerce Act of 1997 was the model for India’s Information Technology Act of 2000. This United Nations measure stated that obstacles to online commerce include the lack of provisions in the national legislation for digital signatures and contracts online. The United Nations General Assembly instructed member countries that passing laws to remedy these problems would ease the transition to electronic commerce. Indian lawmakers started a debate on the Model Law in early 2000 with the final passage of the Information Technology Act on October 17, 2000.
Digital signatures on tax returns, government contracts, and consumer agreements were made legal under the Information Technology Act. Every business or agency that accepts digital signatures must use software to create public keys and private keys. The signer of an agreement must enter a full name or public key before the name is encrypted to create a private key. These two keys must be matched by the recipient of the contract to ensure the identity of the signer. The Indian Parliament has banned digital signatures on trusts and wills because these documents require witnesses before filing.
Another element of the Information Technology Act of 2000 was the creation of government bodies to anticipate new challenges to the law. The Cyber Regulations Advisory Committee is made up of public and private officials who consult with the government on the effects of the law on electronic commerce. Cases brought under the Act are heard before the Computer Appeals Tribunal before appeals to the higher courts. This act also requires digital publication of all activities of these committees, as well as changes to the law for public access.
The Indian Parliament addressed the concerns about new online commerce methods with the Amendment Act of 2008. This revision amended Section 43 of the original Act to increase corporate responsibility to ensure the safety of consumers’ identity. The years following the passage of the law saw trends such as online auction websites and an increase in the use of computers for business transactions. Firms offering online transaction and digital signature capabilities to Indian consumers can also be sued for malpractice under the amendment if they fail to protect consumers from identity theft.
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