Achieving Compliance with India’s Digital Personal Data Protection (DPDP) Act
India’s Digital Personal Data Protection (DPDP) Act, which came into force in July 2024, marks a significant shift in how organizations handle personal data. The Act aims to balance individuals’ right to privacy with the lawful processing of their data, setting new compliance standards for businesses operating in India. Whether you’re a business owner, data protection officer, or IT security professional, understanding and implementing the DPDP Act is essential to avoid penalties and safeguard personal data.
This blog explores the key aspects of the DPDP Act, including its history, applicability, individual rights, penalties, and organizational obligations. It also offers insights into best practices for achieving compliance.
Understanding the DPDP Act: A Brief History
The DPDP Act is the fourth version of India’s attempt to introduce a comprehensive privacy law. The journey toward strong data protection legislation began in 2017, when the Supreme Court of India recognized the right to privacy as a fundamental right in the landmark Puttaswamy Judgment. This highlighted the inadequacy of existing laws, such as the SPDI Rules (2011), to protect individuals’ personal data.
Since then, multiple versions of the Personal Data Protection Bill were introduced but faced hurdles. The Data Protection Bill 2021, which drew comparisons to the European Union’s GDPR, was withdrawn in August 2022.
The breakthrough came when the Digital Personal Data Protection Bill 2023 was approved by Parliament in August 2023 and formally enacted as the DPDP Act. By July 2024, the Act had gone into full effect, setting clear obligations for organizations that process digital personal data.
Who Needs to Comply with the DPDP Act?
The DPDP Act applies to all digital personal data processed in India and has extraterritorial reach, meaning it also applies to foreign businesses if they handle the data of Indian citizens. Specifically, the Act covers:
- Organizations that collect or process data that can identify individuals
- Data that is collected or stored digitally
- Businesses offering goods or services to individuals in India, even if the business is located outside India
However, the Act does not apply to:
- Non-digitized, offline personal data
- Aggregated or anonymized data
- Data collected for personal, household, or domestic use
- Publicly available personal data
Organizations operating in India, especially those in banking, healthcare, fintech, telecom, and e-commerce, must ensure compliance to avoid severe penalties.
Rights Protected Under the DPDP Act
The Act grants individuals, referred to as Data Principals, several privacy rights over their personal data:
- Right to Know: Individuals must be informed about the data being collected, its purpose, and third parties with whom it is shared.
- Right to Access: Individuals can request access to their personal data held by an organization.
- Right to Correction & Deletion: Individuals can correct inaccuracies in their personal data or request its deletion under certain conditions.
- Right to Object: Individuals can object to their data being processed in specific circumstances.
- Right to Data Portability: Users can transfer their personal data from one organization to another under certain conditions.
- Right to File Complaints: Individuals can lodge complaints with the Data Protection Board (DPB) if they suspect violations of the DPDP Act.
Organizations must implement processes to handle these requests promptly and efficiently.
Penalties for Non-Compliance
Failure to comply with the DPDP Act can result in significant financial penalties. Below are some of the key fines:
- Failure to prevent a personal data breach – Penalty: Up to ₹250 crore ($30 million)
- Failure to notify affected individuals or DPB about a breach – Penalty: Up to ₹200 crore ($25 million)
- Failure to follow child data protection obligations – Penalty: Up to ₹200 crore ($25 million)
- Non-compliance by significant data fiduciaries – Penalty: Up to ₹150 crore ($18 million)
- Breach of any other provision – Penalty: Up to ₹10 crore ($1.2 million)
These strict penalties make it crucial for organizations to invest in robust data protection strategies.
Organizational Obligations Under the DPDP Act
To comply with the DPDP Act, organizations—referred to as Data Fiduciaries—must follow these key obligations:
1. Obtain Valid Consent
Organizations must obtain explicit, informed, and unambiguous consent from individuals before processing their personal data, except in cases where exemptions apply (e.g., legal compliance or national security).
2. Process Data Only for Intended Purposes
Personal data should only be used for the purpose stated at the time of collection. Any additional use requires fresh consent.
3. Implement Strong Data Security Measures
Organizations must adopt technical and organizational measures to prevent unauthorized access, use, disclosure, or alteration of personal data. This includes:
- Encryption and tokenization for data security
- Access controls and role-based permissions
- Regular security audits
4. Respond to Data Subject Requests
Businesses must establish mechanisms to respond to individual requests for data access, correction, or deletion within a reasonable timeframe.
5. Report Data Breaches within 72 Hours
In the event of a personal data breach, organizations must report the breach to the DPB within 72 hours and notify affected individuals.
6. Special Obligations for Processing Children’s Data
Companies handling children’s data must implement additional safeguards, including age verification and parental consent mechanisms.
7. Appoint a Data Protection Officer (DPO)
Large organizations and significant data fiduciaries should appoint a DPO to oversee data protection compliance and act as a contact point for authorities.
How CryptoBind Helps Organizations Comply with the DPDP Act
CryptoBind is a leading provider of data protection and privacy solutions, empowering organizations to secure personal data, ensure compliance, and mitigate cyber threats. Here’s how CryptoBind solutions help businesses align with the DPDP Act:
CryptoBind offers a comprehensive data protection platform designed to help organizations comply with the DPDP Act. It includes key features such as data encryption, access control, and auditing to safeguard sensitive information.
- Advanced Data Encryption
CryptoBind’s encryption solutions ensure data is protected at all stages:
- At Rest: Encrypts stored data to prevent unauthorized access in case of breaches.
- In Transit: Protects data moving between systems and networks.
- In Use: Utilizes Privacy Enhancing Technologies (PETs) to secure data even when actively processed.
- CryptoBind Hardware Security Module and Enterprise Key Management:
CryptoBind HSM and EKMS ensures the secure storage and handling of encryption keys. By managing cryptographic keys effectively, organizations can:
- Prevent key compromise, ensuring encrypted data remains protected.
- Achieve regulatory compliance by maintaining strong encryption policies.
- Auditing & Access Control
CryptoBind’s auditing tools enable organizations to monitor who accesses personal data and when. This helps in:
- Tracking data access logs for compliance and security audits.
- Detecting unauthorized activities to prevent data breaches.
- Incident Response & Breach Mitigation
With CryptoBind’s security framework, organizations can implement a robust incident response strategy, including:
- Real-time breach detection and alerts to mitigate threats immediately.
- Automated data protection workflows to prevent unauthorized access.
- Compliance reporting tools to ensure regulatory alignment.
Conclusion
The DPDP Act marks a significant step in India’s data privacy landscape. Organizations must take proactive measures to comply with the Act’s provisions and strengthen their data security posture.
CryptoBind provides end-to-end data protection, encryption, and privacy solutions that enable businesses to meet DPDP requirements effectively. From encryption and key management to auditing and compliance, CryptoBind ensures that organizations stay ahead in the evolving data protection landscape.
Is your organization ready for DPDP compliance?
Contact us today to secure your data and ensure compliance with India’s data privacy regulations.
Read more about our articles:
DPDP Act Compliance Checklist for Businesses
Impact of the Digital Personal Data Protection Act 2023 on Businesses in India
