DPDP Act – The Dawn of a New Era in Data Protection in India

India’s rapid digital transformation has resulted in unprecedented volumes of personal data being processed by both public and private entities. This has increased risks associated with misuse, unauthorised access, breaches, and loss of individual privacy.

Against this backdrop, the Government of India enacted the Digital Personal Data Protection Act 2023, followed by the Digital Personal Data Protection Rules, 2025, establishing a comprehensive statutory framework for the protection of digital personal data. The DPDPA represents a fundamental shift from fragmented obligations to a unified, rights-based, and accountability-driven data protection regime. The Act seeks to strengthen privacy governance, accountability, and resilience across India’s digital ecosystem.

Why Was DPDP Act Introduced?

India’s digital economy has experienced unprecedented growth, with over 800 million internet users at the start of 2025, generating vast quantities of personal data daily. This rapid digitalization, combined with increasing cyber threats and growing consumer awareness, created an urgent need for robust data privacy laws. The DPDP Act addresses this need by establishing clear rights for individuals and corresponding obligations for organizations processing their data. It encompasses fundamental rights of individuals to control their personal information, builds trust in digital services, and establishes India as a responsible player in the global digital economy. For businesses, understanding and implementing proper data privacy practices has become essential for sustainable operations.

What Fundamentally Changes under the DPDP Act?

The DPDP Act moves India from a consent-light, sectoral privacy model to a unified, rights-based privacy regime.

Related Read: India’s DPDP Act: Impact on Business Operations

Earlier regime (pre-DPDP)

  • Fragmented obligations (IT Act, SPDI Rules, sectoral RBI/SEBI norms)
  • Privacy largely policy-driven, not enforceable rights
  • Weak accountability and penalties

DPDP regime

  • Statutory rights for individuals
  • Clear duties for organizations
  • Heavy penalties (up to ₹250 crore per instance)
  • Privacy becomes a board-level and operational risk, not just legal text

Applicability

The Act establishes the legal framework governing the processing of digital personal data in India. Its applicability is defined by the nature of the data, entities covered and its nexus with India, rather than by sector or organization size.

Nature Of Data

The Act is only applicable to electronically stored personal data. Personal data refers to all data which pertains to any individual who can be identified by or from such data by whatever means.

Entities Covered

The Act applies to:

  • Data Fiduciaries- these are parties that define the intent and method of processing personal data.
  • Data Processors – these are parties that process personal data as agents of a Data Fiduciary.

Related Read: SEBI CSCRF: Strengthening Organizational Security through Access Controls and Audit Logs

Territorial Applicability

• Processing Within India: The Act applies to processing of digital personal data within the territory of India.

• Cross border Applicability: The Act also applies to processing of digital personal data outside India, if such processing is in connection with offering goods or services to Data Principals in India.

Key Provisions of Data Privacy Laws in India

The DPDP Act and its regulations provide an elaborate structure regulating the collection, processing, storage, and transfer of personal data. These provisions are very essential to organisations and need to be well understood in order to maintain compliance.

Consent Requirements

The processing of the personal data of data principals is based on their free informed consent that is specific, informed, and free. Also, it should be unconditional and not accompanied by any ambiguities. The consent mechanism ought to clearly state the purpose of the data being processed and the kind of the data being collected.

Data Principal Rights

India’s data privacy laws grant individuals the following comprehensive rights over their personal data:

  • Right to access information about the data processing activities.
  • Right to correction and erasure of personal data.
  • Right to redressing grievances by way of specially established mechanisms.
  • Right to nominate representatives for exercising rights.

Data Fiduciary Obligations

Organizations that handle personal information need to put in place extensive measures to ensure adherence to the stipulations of data privacy policy as mentioned below:

  • Put in place reasonable security protection to safeguard personal data.
  • Minimize retention to the required time and ensure the accuracy of data.
  • Inform breaches to Data Protection Board and victims.
  • Appoint Data Protection Officers for significant Data Fiduciaries, as may be notified by the Central Government under the DPDP Act.

The Five Pillars of Data Privacy Compliance

Pillar Description
Accountability and Governance Make data privacy accountable within the organization
Data Inventory and Classification Make personal data completely transparent within the organization
Technical and Organisational Measures Use powerful security measures such as encryption, access control and monitoring, backed by organizational controls like training of employees, vendor controls, and incident response procedures
Rights Management Develop effective procedures to process data principal requests within the required time
Continuous Monitoring and Improvement Ensure continuous checks of the compliance status through regular audits, assessments, and reviews

 

Implementation Timeline for DPDP Compliance

Phase Implication for Organizations
Immediate (on publication) Foundational and procedural provisions apply immediately
After 12 months Ecosystem readiness for consent management frameworks
After 18 months Core operational obligations including notices, consent, security safeguards, breach notification, children’s data processing, retention, and grievance mechanisms

 

Penalties for Non-Compliance with the DPDP Act

The Act has inflicted serious monetary fines for violations making data privacy compliance a business requirement. Data Protection Board determines penalties depending on some of the factors such as the nature and the severity of the breach, action taken to minimize damage and whether the breach is recurring and the effect on data principals.

Violation Type  Maximum Penalty 
Failure to prevent data breach due to inadequate security  ₹250 Crore 
Processing children’s data without verification  ₹200 Crore 
Failure to notify Data Protection Board of breaches  ₹200 Crore 
Non-compliance with DPB orders or directions  ₹50 Crore 
Other violations of DPDP Act provisions  ₹10,000 to ₹50 Crore 

Key Challenges

Following are some of the main challenges that organizations will encounter as they navigate the evolving data privacy landscape in India.

Complex Compliance Requirements

Related Read: Strengthening Cyber Resilience: Employee Awareness and Cyber Hygiene Training

The DPDP Act includes strict conditions for businesses to secure the privacy and protection of the personal data. Moreover, as the compliance requirements are dynamic, the firms will also need to be ready to make changes, which may be expensive and time-consuming.

Outdated Technology Infrastructure

The infrastructure lacks built-in privacy controls such as (encryption, masking, redaction, minimization, audit trails) and compliance is therefore complex and costly.

Cross Border Data Transfers

Global enterprises need to manage their cross-border data transfer flows to match compliance needs strictly to avoid penalties.

Increased Compliance Costs

Adherence to the DPDP Act will become more expensive as organizations might have to install sophisticated data security means, carry out frequent audits, and install more tools to identify and prevent breaches.

The Road Ahead

The DPDP 2025 framework is not a mere compliance milestone but also a strategic turning point that demands organizations to transform rapidly. Organizations should begin their compliance journey now to ensure they meet the staggered implementation timelines and build sustainable data protection practices. By integrating DPDPA requirements within governance, operations, and culture, organisations will be in a better place to handle privacy risks, retain trust, and be digitally resilient in the long term. Timely action will help organizations avoid penalties and gain consumer trust in an era where privacy is a competitive differentiator.

Why Choose InCorp Global?

InCorp Advisory offers comprehensive data privacy and compliance services to help organizations navigate India’s evolving regulatory landscape. Our experienced team provides:

  • DPDP Act compliance assessments and gap analysis
  • Data mapping and privacy impact assessments
  • Policy development and consent management frameworks
  • Security safeguard implementation guidance
  • Employee training and awareness programmes
  • Ongoing compliance monitoring and support

To know more about our services, contact us at info@incorpadvisory.in or call (+91) 77380 66622 to discuss your data privacy compliance requirements.

Authored by:
CA Narasimhan Elangovan | Cybersecurity

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