What is Data Privacy?
Data privacy refers to the right of individuals to control how their personal information is collected, used, stored, shared, and protected. In an increasingly digital world, personal data, such as names, contact details, identification numbers, financial information, health records, online behavior, and location data, has become a critical asset for organizations and a sensitive concern for individuals.
At its core, data privacy is about trust and accountability. It ensures that personal data is processed only for legitimate purposes, in a transparent, secure, and respectful manner, in accordance with individual rights. As digital services expand across banking, healthcare, e-commerce, education, telecom, and governance, safeguarding personal data has become essential to preventing misuse, identity theft, surveillance risks, and erosion of public trust.
Globally, data privacy has evolved from a voluntary best practice into a regulated legal obligation. Governments across the world now recognize that strong data protection laws are essential for protecting citizens, enabling secure digital innovation, and supporting cross-border data flows in a connected economy.
Evolution of Data Privacy: Global and Indian Perspective
Global History of Data Privacy
The concept of privacy predates the digital age. Early legal thinking around privacy focused on protection from intrusion and surveillance. However, with the rise of computers and automated data processing in the mid-20th century, privacy concerns evolved into questions about how personal information is collected, stored, and used.
In 1980, the OECD Privacy Guidelines introduced the concept of Fair Information Practices (FIPs), laying down foundational principles such as purpose limitation, data minimization, transparency, and accountability. These principles later influenced several national data protection laws.
The most influential modern data protection law is the European Union’s General Data Protection Regulation (GDPR), which took effect in 2018. GDPR set a global benchmark by introducing strong data subject rights, strict consent requirements, heavy penalties, and extraterritorial applicability. Following the GDPR, many countries have enacted or updated their privacy laws, including Brazil’s LGPD, California’s CCPA/CPRA, Singapore’s PDPA, and the UK’s GDPR.
These global developments significantly shaped India’s approach to data protection.
History of Data Privacy in India
India’s journey toward a formal data protection law began with constitutional interpretation rather than legislation. In the landmark judgment of Justice K.S. Puttaswamy vs. Union of India (2017), the Supreme Court of India unequivocally recognized privacy as a fundamental right under Article 21 of the Constitution.
Following this judgment, the government constituted expert committees to draft a data protection framework. The Personal Data Protection Bill, 2019, went through multiple revisions, public consultations, and parliamentary scrutiny. After withdrawing earlier drafts, the government introduced a restructured and simplified law, culminating in the Digital Personal Data Protection Act, 2023.
Unlike earlier drafts, the DPDP Act adopts a principles-based, outcome-oriented approach, focusing on accountability rather than excessive prescriptive controls.
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Understanding the DPDP Act
The Digital Personal Data Protection (DPDP) Act, 2023, is India’s first comprehensive legislation dedicated exclusively to the protection of personal data in digital form. Enacted after years of deliberation, public consultations, and global benchmarking, the DPDP Act establishes a clear legal framework for the collection, processing, storage, and sharing of personal data in India.
At its core, the DPDP Act aims to strike a balance between innovation, economic growth, and individual privacy. As India’s digital economy expands across sectors such as banking, healthcare, e-commerce, fintech, telecom, and governance, protecting personal data has become crucial to maintaining trust in digital systems.
This page serves as a primary authoritative resource on the DPDP Act. It is designed for businesses, data fiduciaries, compliance professionals, technology leaders, legal teams, and citizens who want to understand the law in its entirety, its origins, principles, obligations, rights, sectoral impact, and how it compares with global privacy laws, such as GDPR and CCPA.
Scope and Applicability of the DPDP Act
The Digital Personal Data Protection (DPDP) Act governs the processing of digital personal data and defines clearly when and where its provisions apply. The Act is designed to ensure that personal data is handled lawfully, fairly, and securely across India’s expanding digital ecosystem.
The DPDP Act applies to the processing of digital personal data in the following circumstances:
- When personal data is collected directly in digital form, such as through websites, mobile applications, digital platforms, or electronic records
- When personal data is initially collected in offline form but is subsequently digitized and processed using digital systems
In terms of territorial scope, the Act applies to data processing activities conducted within India’s territory. It also has extraterritorial applicability, meaning it extends to processing conducted outside India if it is connected with the offering of goods or services to individuals in India. This ensures that foreign entities handling the personal data of individuals in India are also brought within the regulatory framework, reinforcing data protection beyond geographical boundaries.
The DPDP Act does not apply to specific categories of data processing, including:
- Personal data processed by an individual for purely personal or domestic purposes, where there is no commercial or professional intent
- Processing activities that fall under specific exemptions, such as those related to national security, law enforcement, public order, research, or statistical purposes, provided they meet the conditions and safeguards prescribed under the Act and its rules
Through this clearly defined scope and applicability, the DPDP Act strikes a balance between protecting individual privacy and legitimate state and organizational needs, while ensuring accountability in the digital processing of personal data.
Key Definitions Under the DPDP Act
Understanding the DPDP Act begins with its core terminology
Personal Data refers to any data about an individual who is identifiable by or in relation to such data.
Data Principal is the individual to whom the personal data relates. In the case of children or persons with disabilities, lawful guardians act on their behalf.
Data Fiduciary is any entity—government or private—that determines the purpose and means of processing personal data.
Data Processor processes personal data on behalf of a Data Fiduciary.
Consent Manager is a registered entity that enables Data Principals to manage, review, and withdraw consent through a transparent platform.
Significant Data Fiduciary (SDF) refers to certain Data Fiduciaries classified by the government based on factors such as the volume and sensitivity of data, the risk to individual rights, and the impact on national interests.
Core Principles of the DPDP Act
The DPDP Act is built around a set of foundational principles that govern all data processing activities.
Lawful and Transparent Processing
Personal data must be processed only for lawful purposes and in a transparent manner. Data Principals must be clearly informed about how their data is being used.
Purpose Limitation
Data may only be collected and processed for specific, explicit, and lawful purposes. Any use beyond the stated purpose requires fresh consent or lawful justification.
Data Minimization
Only data that is necessary for the stated purpose should be collected. Excessive or irrelevant data collection is discouraged.
Accuracy of Data
Data Fiduciaries must take reasonable steps to ensure that personal data is accurate and up-to-date.
Storage Limitation
Personal data should not be retained beyond the period necessary for the purpose for which it was collected, unless required by law.
Accountability
Data Fiduciaries are responsible for compliance with the DPDP Act and must demonstrate such compliance through policies, controls, and governance mechanisms.
Consent Under the DPDP Act
Consent is the primary lawful basis for processing personal data under the DPDP Act.
Consent must be free, specific, informed, unconditional, and unambiguous, and must be provided through an explicit affirmative action. Data Principals must receive notice.
This notice must now be available in English and all 22 Eighth Schedule languages and must include an “Itemized List” of the personal data being collected.
Consent must be as easy to withdraw as it is to give.
The Act also recognizes legitimate uses, where consent may not be required, such as compliance with legal obligations, medical emergencies, employment purposes, or the provision of government benefits.
Rights of Data Principals
The DPDP Act empowers individuals with enforceable rights over their personal data.
Data Principals have the right to:
- Access information about their personal data
- Seek correction or erasure of inaccurate or outdated data
- Withdraw consent at any time
- Grieve and seek redressal
- Nominate another individual to exercise rights in case of death or incapacity
These rights place a strong obligation on organizations to establish responsive and auditable rights-management processes.
Obligations of Data Fiduciaries
Organizations acting as Data Fiduciaries must implement robust governance and security measures.
Key obligations include:
- Providing clear and accessible privacy notices
- Implementing appropriate technical and organizational safeguards
- Ensuring data accuracy and security
- Reporting personal data breaches to the Data Protection Board and affected individuals without delay.
- Establishing grievance redressal mechanisms
Significant Data Fiduciaries have additional obligations, such as appointing a Data Protection Officer (DPO), conducting Data Protection Impact Assessments (DPIAs), and undergoing periodic audits.
Data Protection Board of India
The Data Protection Board of India (DPBI) is the regulatory authority responsible for enforcing the DPDP Act. The Board has powers to:
- Inquire into complaints and breaches
- Impose financial penalties
- Issue directions for compliance
The DPDP Act establishes a statutory penalty framework under which the Data Protection Board may impose significant monetary fines of up to ₹250 crore, depending on the nature and severity of the breach. Notably, these are penalties remitted to the State and do not provide individual compensation to Data Principals.
Penalties and Enforcement under the DPDP Act
Under the Digital Personal Data Protection (DPDP) Act, 2023, enforcement is structured around monetary penalties rather than criminal sanctions. The Act empowers the Data Protection Board of India (DPB) to impose fines after giving an organization a reasonable opportunity to be heard. Penalties can range from relatively small administrative fines to substantial financial penalties, running into hundreds of crores of rupees, depending on the nature and severity of the violation.
Exact Penalty Structure
- Failure to take reasonable security safeguards
• Highest penalty: Up to ₹250 crore
This is the maximum cap for failures in implementing appropriate technical and organisational safeguards to prevent personal data breaches, reflecting the critical importance of cybersecurity. - Failure to notify the Board and affected Data Principals of a personal data breach
• Penalty: Up to ₹200 crore
Delayed or missing breach notifications can significantly increase harm; therefore, the Act imposes one of its highest fines in this instance. - Non-fulfilment of additional obligations in relation to processing children’s data
• Penalty: Up to ₹200 crore
Children’s data is treated as especially sensitive, so non-compliance with specific protections triggers this high penalty. - Non-fulfilment of obligations of a Significant Data Fiduciary
• Penalty: Up to ₹150 crore
Entities designated as Significant Data Fiduciarieshave enhanced duties (such as audits and impact assessments), and failure to meet them carries a distinct cap. - Violation of duties by a Data Principal
• Penalty: Up to ₹10,000
Individual users also have duties (e.g., not submitting false information), and low-level penalties are prescribed for breaches of those duties. - Breach of any term of a voluntary undertaking accepted by the Board
• Penalty: Up to the applicable penalty for the related underlying breach
If an organisation violates a voluntary compliance commitment it made to the Board, penalties equivalent to those for the relevant underlying breach can apply. - Other breaches of the Act
• Penalty: Up to ₹50 crore
For contraventions that don’t fall into the specific categories above but still violate the Act or Rules, a general penalty cap applies.
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Sector-Wise Impact of the DPDP Act
Banking, Financial Services, and Insurance (BFSI)
Banks, NBFCs, insurers, and fintech companies process vast volumes of financial, identity, and behavioral personal data, making them high-risk data fiduciaries under the DPDP Act. Compliance requires robust consent management frameworks, particularly for data used beyond core contractual purposes such as analytics, cross-selling, and marketing. Organizations must strengthen breach preparedness through incident response plans, continuous monitoring, and mandatory reporting mechanisms. Vendor and third-party risk management becomes critical, as financial institutions rely heavily on outsourced service providers and technology partners. Additionally, auditability, data minimization, and clear data retention policies are crucial for demonstrating accountability to regulators and maintaining customer trust.
Healthcare and Life Sciences
Healthcare organizations handle highly sensitive personal data, including medical records, diagnostic results, genetic information, and insurance details. Under the DPDP Act, healthcare providers must ensure strict purpose limitation, collecting and processing personal data only for lawful and clearly defined medical or operational purposes. Strong access controls, encryption, and role-based data handling are necessary to prevent unauthorized access and data leaks. At the same time, organizations must balance compliance with the practical needs of patient care, public health initiatives, and medical research, ensuring that data sharing for research or analytics is conducted in a lawful, transparent, and secure manner.
IT, SaaS, and Technology Companies
Technology companies, particularly SaaS providers and digital service platforms, often act as data processors or significant data fiduciaries because they enable data-driven services. The DPDP Act requires these organizations to redesign data flows, privacy notices, and internal processes to align with consent-based processing and transparency obligations. Privacy by design and privacy by default must be embedded into product architecture, from onboarding flows to data storage and deletion mechanisms. Companies must also provide clear mechanisms for data principal rights such as access, correction, and erasure, while ensuring that cross-border data transfers comply with government-notified conditions.
E-Commerce and Retail
E-commerce platforms and retailers collect personal data across the customer lifecycle, including browsing behavior, purchase history, payment information, and delivery details. Under the DPDP Act, transparent consent mechanisms are required for data collection, behavioral monitoring, and targeted advertising. Organizations must exercise greater control over customer behavioral monitoring practices and ensure that data is used only for the purposes communicated to the user.
Secure data sharing with logistics partners, payment gateways, and marketing vendors becomes a compliance priority, supported by clear contractual obligations and continuous oversight to prevent misuse or unauthorized processing.
Telecom and Digital Platforms
Telecom operators and large digital platforms process vast amounts of personal data, including call data records, location information, and behavioral data. This extensive and continuous data processing places these organizations under heightened regulatory scrutiny. The DPDP Act emphasizes accountability, requiring strong governance structures, internal audits, and risk assessments to manage privacy risks. Transparency in how user data is collected, analyzed, and shared is critical, particularly for behavioral tracking and targeted services. Organizations must also be prepared to respond swiftly to data breaches and user grievances, given the scale and sensitivity of the data involved.
Education and EdTech
Educational institutions and EdTech platforms process the personal data of students, parents, and educators, with a significant portion of this data involving children (defined as individuals under 18). The DPDP Act mandates enhanced safeguards for such data, including verifiable parental consent and stricter controls on data usage and sharing. Organizations must ensure that children’s data is not exploited for profiling, targeted advertising, or non-essential analytics. Clear communication with parents and guardians, secure digital learning platforms, and limited data retention practices are crucial for maintaining compliance while supporting digital education initiatives.
Government and Public Sector
Government departments and public sector bodies also qualify as Data Fiduciaries under the DPDP Act and are required to comply with obligations related to data security, transparency, and accountability. While certain lawful exemptions may apply for national security, law enforcement, or public interest functions, these entities must still implement reasonable safeguards to protect personal data from breaches and misuse. Clear data governance frameworks, defined roles and responsibilities, and effective grievance redressal mechanisms are crucial to ensuring responsible data handling and fostering public trust in government-led digital initiatives.
DPDP Act vs Global Privacy Laws
DPDP vs GDPR
The EU’s General Data Protection Regulation (GDPR) is widely regarded as one of the most comprehensive and prescriptive data protection laws in the world. It governs whether digital or non-digital (if part of a structured filing system). It establishes multiple lawful bases for processing, including consent, contract, legal obligation, vital interests, public task, and legitimate interests. In contrast, India’s Digital Personal Data Protection (DPDP) Act adopts a more principles-based and streamlined approach. Its scope is limited to digital personal data, reflecting India’s digital-first regulatory intent. DPDP places strong emphasis on consent as the primary ground for processing, supplemented by a limited set of “legitimate uses,” thereby reducing legal complexity for organizations. While GDPR is more detailed in its procedural requirements, DPDP aims to balance individual rights with ease of compliance and scalability for India’s rapidly growing digital ecosystem.
DPDP vs CCPA/CPRA
The California Consumer Privacy Act (CCPA), along with its amendment through the California Privacy Rights Act (CPRA), is heavily centered on consumer empowerment and transparency around data collection, sharing, and monetization. A key feature of the CCPA/CPRA is the concept of “sale” and “sharing” of personal data, which requires businesses to provide opt-out mechanisms and disclosures related to the commercialization of data.
The DPDP Act, on the other hand, does not revolve around data sale or monetization terminology. Instead, it frames organizations as Data Fiduciaries with clear accountability and responsibility toward individuals’ data. The focus under DPDP is on lawful processing, purpose limitation, consent management, and trust-based handling of personal data, rather than primarily on consumer opt-outs from data sales. This reflects India’s approach of emphasizing fiduciary duty and data stewardship over market-driven data exchange models.
DPDP vs Other Asian and Emerging Privacy Laws
When compared with other privacy laws such as Singapore’s Personal Data Protection Act (PDPA) or Brazil’s Lei Geral de Proteção de Dados (LGPD), the DPDP Act stands out for its relatively straightforward structure and fewer legal bases for processing. Laws like PDPA and LGPD provide broader grounds for lawful processing and more detailed compliance obligations, which can increase regulatory complexity. DPDP intentionally narrows these bases to consent and specified legitimate uses, making compliance more straightforward while still ensuring strong protections for individuals. At the same time, DPDP introduces robust enforcement mechanisms, including significant financial penalties and centralized regulatory oversight. This combination of structural simplicity and strict enforcement reflects India’s intent to create a pragmatic yet impactful data protection regime aligned with both domestic needs and global privacy expectations.
Why DPDP Compliance Is a Strategic Imperative
DPDP compliance is not just a legal requirement; it is a business differentiator. Organizations that align early benefit from:
- Increased customer trust
- Reduced breach risk
- Better data governance
- Stronger regulatory readiness
As India’s digital ecosystem matures, DPDP will become central to enterprise risk management, cybersecurity, and brand reputation.
Conclusion: The Future of Data Protection in India
The Digital Personal Data Protection Act, 2023, marks a defining moment in India’s digital journey. It establishes privacy as a cornerstone of trust, innovation, and governance. For organizations, DPDP is an opportunity to rethink how data is collected, used, and protected, not merely to comply, but to lead responsibly in a data-driven economy.
Seqrite helps organizations translate DPDP compliance from a regulatory requirement into a structured, enforceable, and sustainable data privacy program. With integrated capabilities across data discovery, classification, consent management, access governance, and continuous monitoring, Seqrite enables enterprises to gain visibility into personal data, reduce privacy risks, and demonstrate accountability under the Digital Personal Data Protection Act, 2023. By aligning technology, governance, and security controls, Seqrite empowers businesses to operationalize data privacy, strengthen trust, and stay compliant as India’s data protection landscape continues to evolve.