A data retention policy for an e-commerce website in India needs to align with Indian laws and regulations, including privacy and cybersecurity requirements. Below is a comprehensive guideline for drafting a data retention policy:

Data Retention Policy for E-Commerce Website in India

Purpose of the Policy

To define the guidelines for storing, managing, and securely disposing of customer and business-related data in compliance with Indian laws, including the Information Technology (IT) Act, 2000, and other applicable regulations.

Scope

This policy applies to all data collected, processed, and stored by the e-commerce platform, including customer data, employee data, transaction records, and system logs.

Key Components of the Data Retention Policy

1. Types of Data Collected

• Customer Data: Name, address, phone number, email ID, payment details, purchase history, etc.
• Transactional Data: Order details, invoices, payment records.
• System Logs: User login/logout details, IP addresses, cookies, and session information.
• Marketing Data: Customer preferences, survey responses, and promotional data.

2. Retention Periods

Retention periods are defined based on the type of data and its purpose:

• Customer Data: Retained for as long as the customer account is active or as required to provide services (up to 5 years post-account closure, in line with legal requirements like the Income Tax Act and anti-money laundering laws).
• Transaction Records: Retained for at least 8 years, as per the Companies Act, 2013, and GST regulations.
• System Logs: Retained for 180 days as mandated by the Indian IT Act and associated rules.
• Marketing Data: Retained until the customer opts out or withdraws consent.
• Employee Data: Retained as per employment laws and HR policies (up to 7 years post-employment).

3. Data Minimization

• Collect only necessary data to fulfill the purpose for which it is collected.
• Avoid collecting sensitive personal data unless absolutely required.

4. Data Storage and Security

• Encrypt sensitive personal data and payment information.
• Store data on servers located in compliance with local data localization requirements, such as the RBI guidelines for payment data.
• Implement access controls to restrict unauthorized access.

5. Legal and Regulatory Compliance

• Comply with the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011.
• Adhere to sector-specific regulations like those from the Reserve Bank of India (RBI) for financial transactions.
• Ensure compliance with the upcoming Digital Personal Data Protection Act, 2023 (DPDP Act).

6. Disposal of Data

• Delete or anonymize data that is no longer needed for legal, regulatory, or business purposes.
• Ensure secure deletion methods, such as data wiping or shredding, to prevent unauthorized recovery.

7. Customer Rights

• Provide customers the right to:
  • Access their data.
  • Correct inaccuracies in their data.
  • Request deletion of their data, subject to legal constraints.
  • Withdraw consent for marketing communications.

8. Policy Review and Updates

• The policy will be reviewed annually or when significant regulatory changes occur.
• Communicate updates to customers and employees.

Penalties for Non-Compliance

Failure to comply with this policy may result in legal penalties, including fines under the IT Act, DPDP Act, and other applicable laws.

This data retention policy ensures compliance with Indian regulations while protecting customer privacy and maintaining trust. Regular audits and updates are essential to ensure its effectiveness.