Poor drafting

Criminalising publishing of Customs data is a bad idea

It is often the case that the Union Budget throws up some nasty surprises in the fine print — usually clauses inserted by bureaucratic intervention and to which the political decision-makers’ attention may not have been drawn. In the recently presented Budget for 2022-23, one such issue has arisen. The Finance Bill intends to amend the Customs Act by introducing a Section that criminalises the “publishing” of “any information relating to the value or classification or quantity of goods entered for export from India, or import into India, or the details of the exporter or importer of such goods”. This clause has naturally and correctly set off an outcry and been widely condemned by industry groups, academics, and Opposition politicians.

Top officials have defended the clause by saying that it intends to protect only the trade secrets of exporters and importers that may be stolen and sold with an aim to compromise competitiveness and commercial advantage. If so, then there are two immediate questions that must be asked. First, if such private data is being leaked, then what are the administrative steps that have been taken within the trade supervision structure — the Customs offices, major ports, and so on — to end leakage? Second, is there no existing clause under which those leaking data can be prosecuted? If it is a large enough problem to warrant criminalisation, then where is the internal accountability for such leakage? Has there been a proper application of mind regarding the use of existing provisions of law? If, as the Central Board of Indirect Taxes and Customs (CBIC) claimed on Twitter, the only aim is to protect the privacy of specific transactions of Indian businesses, then are not proposed data privacy laws the appropriate location for such provisions?

Certainly, when judged from the limited perspective that the CBIC claims should be applied to the intent of the proposed amendment, it comes across as being drafted in a slapdash and ham-handed manner with limited attention paid to possible negative consequences. If the intent was to protect “personalised, transaction-level information”, that should have been specified. Instead, the amendment is unusually broad in its wording, allowing enormous scope for malicious interpretation by investigative agencies and others. Certainly, there is no reason why either private sector investors or academic observers and analysts of Indian trade should be forced to reckon with this sort of legal sword hanging over their heads. In fact, data on Indian exports should be made more timely and disaggregated further to allow for sharper analysis — as long as it is anonymised and stripped of identifying information.

More broadly, the government must recognise that its promise to make the state less intrusive requires it to draft new regulations, laws, and statutes narrowly and with sharply defined objectives, rather than in a broad manner that hands over excessive powers to police persons, tax officials, or other agencies of the state. On this occasion, the concerns have been pointed out in time. Rather than reflexive defensiveness, the government must recognise that it is over-reaching, and quickly narrow the focus of its clause.