In the communication to Prasad, CAIT has demanded that "government should immediately restrict WhatsApp from implementing the new policy or put a ban on WhatsApp and its parent company Facebook", the traders' body stated.
CAIT said Facebook has more than 200 million users in India and enabling it to access data of every user can pose serious threat to not only the economy but even to the security of the country.
"Though of course, it remains up to the user whether or not they want to message with a business on WhatsApp."
The spokesperson further said that the update does not change WhatsApp's data sharing practices with Facebook and does not impact how people communicate privately with friends or family wherever they are in the world.
"WhatsApp remains deeply committed to protecting people's privacy. We are communicating directly with users through WhatsApp about these changes so they have time to review the new policy over the course of the next month," the spokesperson added.
An email sent to Facebook seeking comment on the issue did not elicit a response.