Cloud computing is a cost effective method to share computing resources of a large scale that can be accessed from any part of the world. Any individual user or company that has the permission to access the cloud infrastructure can use its processing power to run an application, store data, or perform any other computing task. However, with the cost effectiveness and computing power, the regulatory issues are also attached.
We have no dedicated legal framework for cloud computing in India as on date. Indian cyberspace is not a mature one as it is plagued with multiple problems. In these circumstances when the technology is not fully developed and regulatory issues have created a risk environment and uncertainty, the question arises is cloud computing a viable solution in India?
Regarding the legal and regulatory compliance aspects of cloud computing companies must adhere to local laws of many jurisdictions. These include laws pertaining to privacy, data protection (PDF), taxation, data security, etc. It would be a naïve approach to ignore cloud computing legal risks in India. There are specific virtualisation, cloud computing and encryption related legal issues in India that have to be resolved before launching a cloud computing business venture in India.
In short, the cloud computing legal and regulatory requirements in India for businesses and entrepreneurs must be analysed in advance before launching a project. Cloud computing service providers in India are Internet intermediary within the meaning of IT Act, 2000 and they are also required to comply with cyber law due diligence requirements (PDF).
The legal risks of cloud computing may outweigh its benefits for an entrepreneur of he is booked for a legal violation. The cloud computing legal environment in India is still maturing and most of the cloud computing companies in India are not aware of the legal compliances in this regard. Besides the cyber law due diligence, cloud computing due diligence in India must also be complied with by the entrepreneurs.