Data protection is crucial as more of the commerce and business is being done online. And with millions of people sharing their personal data online, especially in India, it’s imperative to try and protect customer data. And there are a variety of ways to do that, with India’s DPDP Act or Digital Personal Data Protection act being a primary example. The act was established in 2023, and the focus is on protecting personal data, while also penalizing companies that misuse customer data.

Why is India’s DPDP Act important?

The government notified the DPDP rules in 2025, and they are slowly getting implemented. With a legal structure attached to it, now it becomes much better and more focused on showcasing the tremendous quality and value that you can get from something like this. India’s DPDP Act has some interesting benefits and upsides, so let’s learn more about it.

Who does the DPDP Act apply to?

The act is applying to personal data processed in digital format within India. It also covers the data that was collected offline and then digitized later on. Plus, it applies to processing outside of India, if the processing is related to offering services/goods to people in India. Basically, the scope is beyond regular corporations. It covers startups, online stores, hospitals, schools, banks, insurance companies, travel agencies, restaurants, hotels, law firms, overseas companies that offer services/products in India and so on. There are a few limited exemptions, but if you are selling things to the Indian population and process their data, then this DPDP Act will most likely cover you.

The core principles of the DPDP Act

• Personal data can only be processed for a lawful purpose, and you also need the consent of the individual. The consent has to be specific, free, unconditional and informed.
• Clear notice is necessary, and the person needs to understand what data is processed and kept, where and how is it kept, for how long and so on. Having all the necessary information is crucial, and that’s exactly something to keep in mind.
• Companies only need to collect data for the stated purpose. If they collect a lot more data than what was necessary and stated beforehand, then naturally they can get into legal hot waters, which is important to keep in mind here.
• Accuracy and storage limitation also matter here. You always want to keep the data accurate and don’t hold it forever. The data needs to fulfill its purpose that you agreed upon with the data holder. Once that happens, you have to delete it.
• If a personal data breach occurs, then there have to be some security safeguards. And naturally, a breach notification should be in place, so the customer knows that the data was leaked in some way.
• On top of that, the DPDP Act requires companies which access customer data to stay accountable. If the data is lost or hacked for some reason, then the regulator will be looking at the company. Hence the reason why you need to take the DPDP Act very seriously. Data loss or theft can go back to you and see you as the one responsible, so it’s imperative to try and tackle the problem to the best of your capabilities.

What rights do your customers have?

Through the DPDP Act in India, people have a variety of rights that you have to abide by. There’s the right to information, right to correction and erasure, right to grievance redressal, right to nominate, and the right to withdraw consent. Just because the person agreed to share data with you, that doesn’t mean you will be able to use it indefinitely. If they want to withdraw their access, the DPDP Act allows them to do so.
Penalties exist, and naturally you have to be accustomed with the DPDP Act in order to know how to abide by its rules. Because if you’re not doing that, you will deal with penalties. Penalties can be up to 50 crore for breaches of the act or the rules by a data fiduciary, 200 crore for failure to notify the board or individuals of a breach, or up to 250 crore for failure to maintain reasonable security safeguards to prevent a personal data breach. Of course, penalties will vary based on the situation and what happened.

Conclusion

It’s a very good idea to get accustomed with the DPDP Act and its rules set. Otherwise, you can end up with a variety of penalties that are rather stringent. The most important thing here is to understand the requirements of the act and follow suit to the best of your capabilities. Having a professional by your side is also a very good idea, as it can help eliminate any unwanted situations and better focus on the experience. One thing is certain, the DPDP Act is a great way for the Indian customers to get their data protected when sharing it with a variety of companies. However, as a business, compliance with DPDP Act is mandatory, otherwise you can have a multitude of penalties applied.