DPDP Act Compliance: Essential Steps for Businesses

Introduction

The Right To Privacy, as affirmed by the landmark Puttaswamy Judgement (2017), is a fundamental right under Article 21 of the Constitution of India, which has laid the foundation for a structured legal regime on data protection. Responding to long-standing gaps in India’s privacy enforcement landscape, the Digital Personal Data Protection Act India (“DPDP Act”) was enacted to regulate the collection, use, and handling of personal data by public and private entities.

The compliances under the DPDP Act are binding legal responsibilities for any business entity that processes personal data of individuals within the Indian territory. This includes domestic startups, business setups, legacy enterprises, and even foreign companies operating digital platforms accessed in India. In practice, the Indian data privacy laws apply far more widely than previous sector-specific or Information Technology Act-based regimes.

The Act introduced a structured set of data protection rules for business entities. Some of the key obligations that companies must prepare for include:

Ensuring that all personal data is collected only with valid and informed consent
Providing users with clear and accessible privacy notices before data collection
Allowing users to withdraw consent and make requests to access, correct, or delete their data
Appointing a Grievance Officer and enabling time-bound resolution of complaints
Limiting the use of personal data to the specific purpose for which it was collected

For businesses that operate in data-heavy sectors such as health, finance, and e-commerce, the stakes are especially high. The new data protection regime under the DPDP Act includes compliance such as enhanced penalties, regular audits, and requirements for internal governance.

This guide provides a practical overview of the DPDP Act and the compliance obligations therein, including key operational checkpoints, penalties, cross-border data rules, and actionable compliance steps. It is intended for companies seeking clarity on how to align their data processing practices with the evolving Indian regulatory framework.

Understanding The DPDP Act: Scope And Applicability

As digital transactions and data flows have grown exponentially over the past few years, the question of who is responsible for protecting personal data has taken centre stage in Indian law. The legislative response in the form of the DPDP Act has been framed in a way that doesn’t merely regulate large technology firms or sensitive sectors; instead, its reach is intended to be neutral, expansive, and scalable across businesses of all sizes and industries.

Territorial and Entity-Based Applicability

One of the most striking features of the DPDP Act is that it shifts away from physical location as the deciding factor; instead, the focus lies squarely on whether personal data of individuals located in India is being processed, and for what purpose.

A few key applicability rules are worth noting:

Any business that operates within India, whether it’s a private company, a government department, a consultancy firm, or a bootstrapped startup, falls within the ambit of the law, so long as it handles personal data.
The law also pulls in overseas entities, including those with no registered presence in India, if they’re targeting Indian users with goods or services. Even just tracking or profiling Indian website users may be enough to bring them under scrutiny.
There’s no turnover threshold or sectoral exemption in the act. Whether a company processes the data of 500 or 5 lakh users, if the personal data is collected from individuals in India, the law applies.

This makes DPDP Act compliance relevant not just for Indian corporates but also for global platforms, SaaS startups, and even smaller tools integrated into Indian apps.

Definitions Which Businesses Must Understand

To implement compliance meaningfully, one must understand the specific terms that the law is based upon. These aren’t abstract definitions; they directly influence legal responsibility and exposure.

Personal data includes anything that identifies an individual, be it a name, email ID, IP address, or even behavioural cues picked up through cookies or pixels. Even if the company is dealing with “non-sensitive” user information, chances are that personal data is still covered.
Processing isn’t limited to acts like collecting or storing data. Even merely accessing, organising, or erasing that data is considered “processing.” So routine IT operations and customer care workflows also come under the radar.
A Data Principal refers to the individual to whom the data belongs. Most compliance protocols will be designed around the rights of the Data Principal.
The term Data Fiduciary is key. It applies to any entity, private or public, that decides how and why the data is being used. Even if a business outsources all its data operations to a third-party vendor, if the decisions originate internally, it will remain the Data Fiduciary.
Lastly, there’s the concept of a Significant Data Fiduciary, or SDF. The Central Government notifies an entity as a significant data fiduciary based on factors like volume, sensitivity of data handled, risk of harm to data principles. Once designated, an SDF faces additional layers of compliance, such as regular audits, risk assessments, and data protection officer appointments.

The enforcement of DPDP Act has changed the compliance landscape for Indian business and entities. The compliance obligations are not confined to a select cohort of businesses; rather, is now an integral component of the legal framework. Henceforward, each company must undertake an assessment to determine its status as a Data Fiduciary under the Act.

Key Compliance Obligations For Businesses

Compliances under the Digital Personal Data Protection Actis not just an abstract requirement; it involves operational changes across departments, including legal, product, engineering, customer experience, and IT. The Act sets out a layered structure of data protection rules for businesses, which must be implemented through policy, infrastructure, and careful planning.

A. Lawful Processing Principles

All personal data must be processed lawfully, fairly, and for legitimate purposes. The following legal bases for processing are recognised:

Consent-based processing: Consent must be free, specific, informed, unconditional, and unambiguous. Consent requires a distinct and explicit action by the Data Principal. This means pre-ticked boxes, implied consent, or silence are not considered valid. A clear opt-in mechanism is essential.

Deemed consent situations: These include cases where processing is reasonably expected (e.g., for contract performance, legal obligations, emergencies, or state benefits). However, each category has specific limitations and documentation requirements.

A failure to structure operations around lawful grounds as provided under the act will amount to a breach of compliance requirements, potentially triggering penalties.

B. Notice and Consent Management

Under the Act, no processing of personal data can begin unless a Data Principal has been served with a clear, complete, and accessible notice covering:

Identity and contact details of the Data Fiduciary
Purpose and nature of data being collected
Rights of the Data Principal
Grievance redressal mechanism
Process for withdrawal of consent

The notice must be delivered in English or in any language specified in the Eighth Schedule of the Constitution, based on the user base. Notices must be embedded into interfaces or communications in a manner that avoids dark patterns or user manipulation.

The consent must be as easy to withdraw as it is to give. Businesses that fail to offer this parity violate their obligations under the act.

C. Data Minimisation and Purpose Limitation

The DPDP Act provides for the principles of Data Minimisation and Purpose Limitation as essential safeguards for the processing of personal data. These principles ensure that data processing activities are proportionate, necessary, and respectful of an individual’s privacy. The Act provides that:

1. The Data Fiduciary must collect only such personal data as is necessary for the specific purpose disclosed in the notice to the data principal.
2. Data Fiduciary must not repurpose personal data for unrelated activities without fresh consent being served to the data principals.

Some of the prohibited practices under these principles include:

Blanket data collection at onboarding without any related purpose
Reusing the personal data for marketing purposes
Offering consent as a condition for unrelated features or benefits

D. Withdrawal of Consent

One of the most important cornerstones of the DPDP Act is that the Data Principals must be allowed to:

Withdraw the previously granted consent, either fully or partially, at any time;
Access an easy, hassle-free, and technology-based mechanism to do so without friction
Be promptly notified of the consequences of such withdrawal such as suspension of services or any other applicable consequences.

Operational implications for Data Fiduciaries include:

They should maintain such systems that track and enforce withdrawn consents.
Customer service teams must be well-trained to handle such requests.
Upon withdrawal of consent, they must ‘cease and cause their Data Processors to cease’ processing the personal data within a reasonable time limit.

These requirements are non-negotiable under the Act and must be implemented proactively.

E. Children’s and Disabled Persons’ Data

Where the processing involves children or individuals with disabilities, the Act imposes additional obligations:

Children are defined as individuals under the age of 18.
Verifiable parental consent must be obtained before processing any of their data.
Data Fiduciaries must not undertake tracking or behavioural advertising directed at children.
For disabled persons, consent may be given by a lawful guardian or authorised representative.

Failure to implement these protections is considered a serious breach of DPDP Act obligations, especially for edtech and family-facing platforms which are widely accessed by children and the younger generation.

TABLE: SUMMARY OF KEY COMPLIANCE REQUIREMENTS FOR BUSINESSES

Area	Requirement	Status Level
Lawful Processing	Consent or valid deemed consent basis documented	Mandatory
Consent Notice	Must be purpose-specific, clear, and multilingual where needed	Mandatory
Consent Withdrawal	Digital process to manage withdrawal; user-friendly interface	Mandatory
Purpose Limitation	No use of data for undisclosed purposes	Mandatory
Children’s Data	Parental consent, no tracking, no advertising	Mandatory
Internal Documentation	Logs of notices served, consents obtained, and requests processed	Strongly Advised

Rights Of Data Principals

The framework under the DPDP Act gives statutory recognition to certain rights of individuals whose personal data is collected or processed by businesses. These individuals are referred to as “Data Principals,” and the businesses or entities collecting the data are designated “Data Fiduciaries”. Under the law, compliance is not limited to obtaining consent and giving notices, but also requires a well-structured mechanism for respecting and responding to user rights in a timely and traceable manner.

A. Right to Access, Correction, and Erasure

Under the current compliance framework, businesses must enable the following:

Allow Data Principals to know what personal data is being processed by the business.
Provide access to a summary or detailed view of the data, ideally via a dashboard or structured request process.
Permit correction of inaccurate, incomplete, or misleading personal data.
Provide a facility for erasure of personal data when consent is withdrawn, or where the data is no longer required for the original purpose.

In cases where such mechanisms are not in place, or where requests are ignored or delayed, it may be treated as a breach of obligations and hence invite penalties. Therefore, it is essential to ensure identity verification during such access and correction requests to prevent abuse.

B. Right to Grievance Redressal

Every business entity falling under the scope of the law must have a readily available means of grievance redressal for the Data Principals, while Significant Data Fiduciaries (SDFs) shall appoint a Data Protection Officer (DPO) who shall be the point of contact for the grievance redressal mechanism. appoint a grievance officer and publish their contact details, as their core obligation under the DPDP Act. The law requires:

Redressal of complaints within a reasonable time (Every data fiduciary must publish the period under its grievance redressal system for responding to the grievances)
A defined and documented internal escalation process
A system to log and track complaints and resolution timeframes

Grievance redressal mechanism is more than just a support function for Data Fiduciaries. It is a legal checkpoint and must reflect actual capacity, not just a published email ID.

C. Right to Nominate

Another important yet operationally overlooked right is the Data Principal’s ability to nominate another person who may exercise their rights in case of death or incapacity. This right would obligate the businesses to have the systems that:

Accept and verify nominations (usually at onboarding or through a later process)
Recognise lawful requests from a nominee, subject to verification
Ensure this provision is reflected in the Privacy Notice and internal SOP

Failure to implement the nomination rights of the Data Principles will lead to the violation of DPDP Act obligations, especially in the case of disputes involving next-of-kin or legal representatives.

D. Record-Keeping and Operational Systems

The Business entities must at all time keep their Operational and Record Keeping Systems updated and must ensure that:

Data access and correction systems are operational and not merely policy-backed.
Requests are tracked and auditable.
A detailed process for escalations, timeouts, and feedback;
Data controllers (Product, Tech, Legal teams) are trained on what a valid request looks like.

Significant Data Fiduciary (SDF): Higher Compliance Thresholds

While the core obligations apply to all Data Fiduciaries, the DPDP Act empowers the government to classify certain businesses as “Significant Data Fiduciaries” or SDFs. This classification is not elective and brings with it enhanced obligations, making it a priority area for legal and compliance teams to monitor.

A. Who Qualifies as an SDF

SDF designation is notified by the Central Government, based on an assessment of several parameters. These include:

Volume and sensitivity of data processed
Risk to the rights and freedoms of individuals
Impact on electoral democracy, sovereignty, or national security
Use of emerging technologies such as AI/ML for large-scale profiling

These parameters mean that even a mid-sized edtech or fintech company could be classified as an SDF, not just large multinationals. Companies operating in high-risk categories must pre-emptively review their practices to be DPDP Act compliant and be ready for an SDF designation.

B. Additional Compliance Requirements for SDFs

The designation of Significant Data Fiduciaries triggers a higher compliance standard for any business entity. The following obligations apply in addition to standard Data Fiduciary duties:

Appointing a qualified Data Protection Officer (DPO) who will be responsible for monitoring, auditing, and reporting compliance internally. The DPO must be based in India and will be the point of contact for the grievance redressal mechanism
Undertaking periodic Data Protection Impact Assessments (DPIAs) to analyse and mitigate risks related to processing activities. This includes assessing new technologies or large-scale profiling features before launch.
Maintaining records of processing operations and conducting regular compliance audits. These may be subject to inspection or request by the Data Protection Board of India.
Implementing enhanced technical and organisational safeguards, access controls, encryption standards, data mapping, and breach response simulations.

These additional measures reflect the higher level of responsibility assigned to SDFs under the Digital Personal Data Protection Act. Businesses that might ignore the possibility of being classified as an SDF, will run the risk of being unprepared when the designation is notified.

Table: SDF Designation & Compliance Checkpoints

Parameter Evaluated by Govt	Trigger Threshold Examples	Related Compliance Action
Volume of Personal Data	Over 10 million users	Appoint DPO; Conduct DPIA
Nature of Processing	Profiling, behavioural targeting	Add risk-based access controls
Sector Sensitivity	Health, Finance, Children’s data	Maintain detailed data flow documentation
Risk to Democratic Process	Polling, electoral management platforms	Legal review and DPIA before rollout
Cross-Border Sensitivity	Servers or analytics running overseas	Contracts and SCCs aligned to Indian rules

If a business entity finds itself meeting more than one of these indicators, they should escalate their compliance efforts proactively, even before the official notification.

Cross-Border Data Transfer And Localisation Rules

While the DPDP Act introduces a rights-based framework for the data governance within the country, it also indirectly sets a compliance boundary for businesses engaging in cross-border data flows. The following provisions are particularly relevant for companies engaged in cross border transfer of data using global cloud infrastructure, overseas analytics tools, or offshoring data operations.

A. Conditions for Transfer Outside India

The current legislative framework provides that the Central Government retains the power to notify specific countries or territories to which personal data of Indian citizens may be transferred. Until such notifications are issued, businesses must operate cautiously and interpret the underlying intent behind the law.

That said, the Act does not impose a blanket prohibition on international transfers. Instead, the law recognises that certain transfers may be necessary for business continuity, service delivery, or contractual obligations, subject to certain safeguards.

Key compliance considerations include:

Data may be transferred outside India to any country or territory, except to such countries or territories as the Central Government may, by notification, restrict. These notifications are expected to be made after an assessment of data protection frameworks in those countries.
In the absence of a notified list, businesses may consider relying on contractual mechanisms such as data transfer agreements, model clauses, free trade agreements or binding corporate rules (BCRs), though the DPDP Act does not explicitly refer to these instruments yet.
Consent must always be taken prior to initiating an international transfer, and the privacy notice must clearly disclose the intended transfer and its purpose.

B. Data Localisation Status

Contrary to expectations, the Act does not introduce a strict data localisation mandate applicable to all businesses. Instead, the approach is more flexible and risk-based. However, this flexibility should not be mistaken for unrestricted liberty.

There is no general requirement to store a copy of the data in India or restrict storage exclusively to Indian servers. This marks a shift from the earlier 2019 draft, which proposed stringent localisation norms.
That said, sector-specific regulators such as RBI, SEBI, IRDAI, and the Ministry of Health continue to impose their own localisation rules. These prevail independently and may coexist with the obligations under the DPDP Act.
Businesses in finance, insurance, defence, and health sectors should assume a more cautious position and maintain Indian server copies unless explicitly exempted.

Thus, localisation of data continues to be a compliance point, though not from the DPDP Act directly, but from overlapping sectoral regulation.

C. Recommendations for Global SaaS and E-Commerce Platforms

Companies operating platforms serving the Indian market, but with back-end operations hosted abroad, must address certain compliance needs:

Include jurisdictional disclosures and transfer mechanisms in their Privacy Policy, along with a specific point of contact for questions on international processing.
Consider adopting internal documentation of all transfers, with logs detailing categories of data, location of processing, and legal basis relied upon.
Where B2B data processors are involved (e.g., cloud service providers, fraud detection vendors), business entities must verify if those vendors are operating within notified jurisdictions or otherwise execute robust contracts.
Use data minimisation and encryption techniques to reduce the risk profile of exported data.

International businesses seeking compliance under the DPDP Act should also factor in the possibility of country-wise restrictions being imposed by the medium of future rules under the Act.

Penalties, Offences And Breach Management

The enforcement framework under the DPDP Act is designed in a way that marks a clear departure from the more lenient guidelines as provided under earlier data rules in India. Unlike the Information Technology Rules, which largely operated through advisory language, the new law has put in place a formal mechanism backed by adjudicatory authority and financial consequences.

What this means for businesses, particularly those operating in consumer-facing or data-heavy sectors, is that the compliances under the DPDP Act are now subjected to more robust legal enforcement. The implications extend beyond mere reputational damage, encompassing financial, operational, and regulatory liabilities.

A. Financial Penalties for Non-Compliance

The statutory framework under Section 33(1) empowers the Data Protection Board of India (DPBI) to impose monetary penalties in the event of a breach or failure to comply with obligations under the Act. These penalties have been structured with enforcement intent and vary depending on the nature and severity of the breach.

Typical instances of non-compliance that could invite regulatory scrutiny include:

Absence of reasonable data security measures or controls;
Failure to address user grievances within the timelines laid out in the privacy policy.
Mishandling or unauthorised processing of children’s data;
Collecting or using personal data without valid, verifiable consent;
Not reporting a data breach to the authority in a timely and accurate manner.

Penalties may extend up to ₹250 crore per violation as provided under the Schedule to the Act. The Board will consider several mitigating and aggravating factors before issuing any direction. These could include:

Whether the violation was isolated or repeated across users
Whether actual harm was suffered by one or more Data Principals
The responsiveness of the Data Fiduciary once the breach was identified
The extent to which remedial action was taken to minimise risk

Unlike contractual disputes, where consequences may be negotiable or deferred, penalties under the Act stem from the statute. From a compliance standpoint, it would be incorrect to view them as operational overheads; rather, they constitute enforceable liabilities under the Act.

B. Reporting Obligations in Case of Data Breach

One of the most essential causes for liability under the Act is the failure to report a data breach. The obligations require businesses to notify the Data Protection Board as soon as they become aware of any data breach incident that may compromise personal data or affect user rights.

While the Act, does not specify any timeframe for breach notifications, Section 7(2)(b) of the Draft Digital Personal Data Protection Rules, 2025, clarifies that any data breach must be reported within 72 hours of the actual knowledge of the breach. The following details are expected in the report:

A brief description of data breach, including the nature of the breach;
The categories or types of personal data that may have been impacted;
Steps taken by the business to contain or remedy the situation;
The name and contact information of the authorised person representing the business.

Depending on the nature of the breach, the Board may also direct the business to inform affected users directly. In practice, this means the business entities must have internal breach response protocols aligned with their sector and size, that would apprise the affected users of a breach and its implications.

While the earlier rules under the IT Act treated breach reporting as a ‘good practice’, the DPDP Act makes it mandatory. Failure to notify a breach would not merely be a procedural lapse, it can, in itself, form the basis for penalties under the Act.

C. Role and Powers of the Data Protection Board

The administrative and enforcement arm of the DPDP Act is the Data Protection Board of India (DPBI). Unlike earlier advisory groups or quasi-regulators, the Board has statutory powers to:

Initiate inquiries based on complaints or on its own motion.
Seek documents, summon company representatives, and examine systems.
Issue directions to halt unlawful processing or initiate remedial steps.
Levy financial penalties through a written, reasoned order.

The Board operates in a quasi-judicial capacity, and is empowered to conduct inquiries and investigations, imposing penalties, issuing directions, accepting voluntary undertakings and hearing grievances. The business entities must ensure that they are capable of:

Cooperating with investigations and responding to notices
Producing internal logs and audit trails upon request
Demonstrating documented compliance with key obligations under the Act.

The Boards and CXOs of the business entities must be briefed in advance regarding such compliances and the designated officers should be trained to coordinate with the regulator.

The DPBI Board is not just a mere administrative body, but it represents the cornerstone of DPDP Act Compliances and will shape the risk landscape for all business entities in India going forward.

Compliance Checklist For Businesses

In daily practice, most businesses struggle not with understanding the law but with identifying what exactly they must do to remain compliant with law. Unlike a licensing regime, compliances under the DPDP Act does not come with a certificate or one-time registration; instead it is continuous, operational, and layered process across departments, ranging from legal to technology, product to HR. This section provides a functional checklist to help business entities, assess their preparedness in line with the expectations of the regulator and the structure of the DPDP Act.

A. Building Operational Readiness Across Functions

Rather than prescribing standardised systems, the DPDP Act identifies key compliance checkpoints pertinent to all industries and use cases. Each of such compliance checkpoint must be addressed either through policy documents, digital infrastructure, or internal SOPs.

DPDP ACT COMPLIANCE STATUS TRACKER

Compliance Area	Requirement Under the Act	Recommended Operational Action
Privacy Notice	Consent must be clear, affirmative, and revocable	Update notice with layered fields & UI embeds
Consent Capture	Officer to be appointed, resolution withinthe timeline	Design click-through consents with withdrawal tab
Grievance Redressal	Officer to be appointed, resolution within timeline	Publish contact; build SOP with backend routing
User Requests Handling	Enable access, correction, erasure of data	Create Web form + ID verification process + timeline logs
Data Breach Process	Report major incidents to Board + affected users	Create template notification + define trigger flow
SDF Add-ons (if notified)	DPO appointment, DPIA reports, periodic audits	Nominate officer, initiate quarterly review & records

B. Department-Level Implementation Notes

Depending on the structure of the organisation, certain areas of this checklist will fall under specific internal teams. The role of such internal teams includes:

Privacy Notice and Grievance Framework should be led by Legal/Compliance Teams;
Consent Systems and Access Requests responsibilities lies with the Product or Tech team;
Breach Response and Internal Logs are to be maintained by the Security or IT team;
External contracts and procurement obligations often fall between Legal and Procurement Teams.

For the future preparedness of the compliance, business entities must map out these responsibilities in writing.

Step-By-Step Compliance Implementation Plan

Once the business entities have reviewed their legal obligations under the DPDP Act, the challenge lies in converting abstract compliance ideas into actual workflows, policies, and system changes. The compliances under the DPDP Act does not follow a one-time checklist model, instead the process is incremental and cross-functional.

Provided below is a layered approach to help teams translate the compliances into executable action. These steps may differ depending upon the sector, maturity, and data volume, but most regulated entities will find them broadly applicable.

A. Drafting Core Policies and Notices

At the very foundation of the DPDP Act compliance sits the requirement to disclose the purpose behind processing the personal data. This must be done through clearly worded, purpose-linked, and transparent documentation.

Draft a privacy policy that includes categories of personal data collected, purposes of processing, retention duration, withdrawal process, grievance contacts, and cross-border disclosures.
Prepare a Grievance Redressal SOP outlining how user complaints will be routed, acknowledged, and resolved. Timelines must be clearly defined.
Create a Data Retention Policy that links each data category to a purpose and defines retention timelines. This is particularly important in sectors like edtech, finance, or healthcare, where businesses store personal data long after the user has left.

B. Internal Governance and Access Controls

A major cause of data breach or non-compliance is not related to external interference, instead it is the internal oversight. To reduce such risks, businesses must establish disciplined governance mechanisms.

Conduct mandatory privacy training for all employees involved in customer data, marketing, analytics, or engineering;
Implement role-based access controls so that only relevant teams can access user data;
Maintain comprehensive logs of all access to sensitive data fields. Such logs are not merely beneficial for forensic investigations; but also serves as demonstrable evidence of diligent compliance efforts.

C. Technology Stack Adjustments

While policy and governance are essential, much of the compliances ultimately comes down to implementation in software systems and customer interfaces. The most common areas requiring immediate reforms include:

Integrating a consent banner on all platforms where personal data is collected. The banner must avoid dark patterns and pre-selected checkboxes.
Introducing cookie control modules, especially if third-party tracking tools are in use.
Providing a visible, simple withdrawal option where users can retract consent to marketing, profiling, or data retention.
Logging every consent action, when it was given, what it covered, and how it was recorded.

Such measures serves as the essential reform mechanism for businesses seeking the compliances under the Act.

D. Vendor and Third-Party Risk Management

While most business entities engage third-party tools or vendors to handle part of their data processing, the primary liability remains with them irrespective of delegated processing activities.”

Key actions include:

Review all vendor contracts to include clauses on data processing scope, security measures, cooperation in the event of an inquiry, and post-contract deletion obligations.
Classifying vendors as Data Processors or independent Data Fiduciaries, based on the level of control they have.
Requesting documentation from vendors to demonstrate their own privacy policies and breach handling frameworks.

E. Ongoing Documentation and Review

For a compliance framework to be truly functional, it must provide verifiable proof of policy implementation, rather than merely policy existence. The following records should be maintained and periodically reviewed:

Internal logs of consent, withdrawals, user requests, breach incidents, and response timelines;
Copies of Data Protection Impact Assessments (DPIAs), particularly if classified as a Significant Data Fiduciary;
Training records, audit reports, and breach simulations.

Lack of comprehensive documentation exposes businesses to significant regulatory risk. Even without a possible data breach, the inability to furnish the evidence of compliance with the obligations can result in the imposition of monetary penalties.

Conclusion – DPDP Act Compliance

The introduction of the Digital Personal Data Protection Act, 2023 signalled a shift in regulatory approach to personal data not merely as an administrative guideline, but as a legally protected right of the individual. For companies processing the personal data of their Indian users, this marks the continuous and multi-dimensional compliance obligation which is no longer optional but is structured, layered, and increasingly critical for business credibility, irrespective of their size, sector, or physical location. Proactive measures, such as clear consent mechanisms, withdrawal of consent, grievance redressal, right to nominate and record-keeping, have been mandated by the obligations set forward under the Act for business entities to navigate and enforce upon. Businesses must align their operations with such measures, either in the form of updated privacy notices, or grievance redressal mechanisms, or technical safeguards which would reduce their legal and financial risks. Non-compliance of the provisions, comes with severe penalties as high as INR 250 Crores, thus highlighting the need for robust internal policies, Proper training to the staff, and continuous monitoring to ensure adherence.

Under the DPDP Act, compliances requirement are not merely a regulatory hurdle but a strategic imperative that fosters trust and accountability. Business Entities must reassess their data practices, implement solutions which are compliant of the obligations under the Act and prepare for potential classification as Significant Data Fiduciaries (SDFs), which would demand additional obligations. The Act while fosters a flexible approach to cross-border data transfers, the business entities must remain vigilant regarding future governmental notifications and existing sector-specific data localisation rules. As and when the enforcement by the Data Protection Board of India (DPBI) will gain momentum, a well-documented compliance strategy will be critical to navigating this new data protection landscape while safeguarding both user rights and organizational resilience.

Frequently Asked Questions (FAQs) – DPDP Act Compliance

1. What exactly is the DPDP Act and does it apply to my business?

Yes, in all likelihood it does. The Digital Personal Data Protection Act, 2023 will apply to any entity, Indian or foreign, that processes the personal data of individuals within India. An important consideration, here is that obligations provided under the Act are not limited to tech companies. If any business is operating an e-commerce site, an app, a CRM system, or even a physical store collecting customer phone numbers for feedback, they will be classified as processing personal data and if that data belongs to an individual located in India, the compliance layer will kick in.

2. Has the government set a deadline for compliance?

As of July 2025, the government has not set any overarching deadline for the full implementation and compliance with the DPDP Act. However, Ministry of Electronics and Information Technology (MeitY) released the Draft Digital Personal Data Protection Rules, 2025, for public consultation. It is advised to the business entities that unlike other statutes where one can react post-notification, DPDP Act will require structural changes, consent systems, vendor contracts, user interfaces and many other compliances and hence delays won’t be defensible once enforcement begins.

3. Is it ever allowed to collect personal data without the individual’s consent?

There are certain limited scenarios where the law permits collection of personal data without individual consent, which is known as ‘deemed consent’. That includes situations like fulfilling contractual obligations, compliance with legal requirements, or during medical emergencies. Besides such situations, the law mandates to have clear consent mechanism, which is valid, specific, informed, and withdrawable. Unlike the earlier IT rules where implicit consent could be argued, under the DPDP Act framework, there is a strict enforceability of the consent mechanism with enhanced penalties for the violators.

4. What qualifies as a proper privacy notice under this law?

The privacy notice has to inform users, upfront and clearly, about what data is being collecting, the reason for collecting such data, the retention period of the data, and what rights such has under the law. There is also a need to provide grievance redressal contact information. The notice should be accessible, written in plain language, and made available in regional languages if the user base demands it.

5. We’re a small team. Do we really need a Data Protection Officer?

Data Protection Officer shall be appointed only in such cases where the business entity is classified as a Significant Data Fiduciary (SDF), which the government will notify based on the volume & sensitivity of personal data, risk to the rights of data principals, potential impact on the sovereignty and integrity of India or data sensitivity. The DPDP Act, clearly state that only Significant Data Fiduciaries must appoint a Data Protection Officer (DPO).

While appointing DPO might not be applicable to every business entity, but focus should be on establishing strong fundamental practices, such as lawful processing, clear privacy notices, consent management, data minimization & purpose limitation and grievance redressal which are required for all Business Entities.

7. Does the law mandate that we store data only in India?

No, the current legislative intent behind the DPDP Act does not mandate the storage of data in India. . However, cross-border transfers are only allowed to countries that the Central Government will notify as permissible. Until that list is published, businesses must be cautious. Notwithstanding DPDP Act compliances, the sectoral regulators like the RBI for fintech or IRDAI for insurance, do require data to be stored in India in some form. So, while the DPDP Act Compliance regime itself is more flexible, business entities cannot ignore overlapping regulations depending upon their service sectors. It is always advised to consulting legal experts before undertaking any processing or storage of data abroad.

About Us

Corrida Legal is a boutique corporate & employment law firm serving as a strategic partner to businesses by helping them navigate transactions, fundraising-investor readiness, operational contracts, workforce management, data privacy, and disputes. The firm provides specialized and end-to-end corporate & employment law solutions, thereby eliminating the need for multiple law firm engagements. We are actively working on transactional drafting & advisory, operational & employment-related contracts, POSH, HR & data privacy-related compliances and audits, India-entry strategy & incorporation, statutory and labour law-related licenses, and registrations, and we defend our clients before all Indian courts to ensure seamless operations.

We keep our clients future-ready by ensuring compliance with the upcoming Indian Labour codes on Wages, Industrial Relations, Social Security, Occupational Safety, Health, and Working Conditions – and the Digital Personal Data Protection Act, of 2023. With offices across India including Gurgaon, Mumbai, and Delhi coupled with global partnerships with international law firms in Dubai, Singapore, the United Kingdom, and the USA, we are the preferred law firm for India entry and international business setups. Reach out to us on LinkedIn or contact us at contact@corridalegal.com/+91-9211410147 in case you require any legal assistance. Visit our publications page for detailed articles on contemporary legal issues and updates.