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Navigating the Compliance Landscape of India's Data Protection Regime

Introduction

In a significant development for India's digital ecosystem, the public consultation window for the Digital Personal Data Protection Act(DPDPA) draft rules has ended on March 5, 2025. This extension gave the businesses, industry bodies, and other stakeholders valuable additional time to review and provide feedback on these critical regulations, which were initially introduced on January 3, 2025.

The DPDPA Rules aim to implement the Digital Personal Data Protection Act passed in August 2023, addressing three key areas that will reshape India's data governance landscape:

• Consent Management: Establishing frameworks for obtaining and managing user consent

• Data Localization: Determining where and how data must be stored within Indian borders

• Data Breach Notification: Creating protocols for reporting and managing data breaches

The Growing Digital Economy & Stakeholder Engagement

This extension reflects the government's commitment to building a comprehensive regulatory framework that incorporates diverse perspectives. The timing is particularly crucial as India's digital economy continues its rapid expansion:

• India's advertising industry is projected to reach ₹1.07 lakh crore in 2025 (dentsu-e4m Advertising Report)

• Digital advertising market expected to grow to ₹59,200 crore by year-end

• Key sectors driving growth include e-commerce, BFSI (Banking, Financial Services and Insurance), and FMCG (Fast-Moving Consumer Goods)

While digital platforms enhance consumer engagement across these industries, the forthcoming DPDPA regulations introduce significant compliance challenges that businesses must navigate strategically.

Key Challenges for Businesses

1. Resource Disparities

Industry experts highlight a concerning divide between large multinational corporations and smaller homegrown tech companies:

"For smaller, homegrown tech companies, navigating DPDPA rules might seem manageable at first due to their agility and market understanding. However, limited financial resources and legal expertise could increase their risk of non-compliance."

2. Children's Data Protection

The management of children's data presents another significant challenge. Mr. Krishaank Jugiani, Senior Associate at CUTS International warns about the potential consequences of the proposed Verifiable Parental Consent (VPC) mechanisms:

• Increased operational costs

• Potential hindrance to digital innovation

• Disproportionate impact on low-income families

• Potential shift toward expensive subscription models

• Compliance costs for smaller platforms potentially reaching $120,000 annually

3. Data Breach Notification Protocols

Data breach notification remains a critical concern under the draft rules. Aayushi Singh, Advocate at the Delhi High Court, identifies a key gap in the current draft:

• Draft provides for breach reporting but lacks specified timelines

• Advocate recommends structured reporting deadlines

• References CERT-In guidelines (mandating notifications within six hours of detection)

4. Cross-Border Data Transfers

Industry bodies, including nasscom , have raised concerns regarding proposed restrictions on cross-border data transfers for Significant Data Fiduciaries (SDFs). Their primary concerns include:

• Questionable security benefits of such restrictions

• Potential disruption to global business operations

• Increased compliance complexity for multinational organizations

Preparing for Regulatory Compliance

Despite these challenges, industry leaders acknowledge the government's consultative approach in developing these regulations. Roland Landers, CEO of the All India Gaming Federation (AIGF), notes:

"The DPDP Act and Rules mark a pivotal regulatory development that will require businesses to undertake substantial operational changes. We welcome the consultative approach and look forward to continued stakeholder engagement."

As India's digital landscape evolves, businesses must proactively align with the upcoming regulatory framework through:

1. Risk-based compliance strategies that allow implementation flexibility

2. Balanced approach to maintaining both data security and innovation

3. Integration of AI-driven marketing strategies while ensuring data protection compliance

The Path Forward

The coming months will be critical as businesses, regulators, and industry leaders refine the DPDPA rules. While judicial clarity on enforcement is still pending, successfully balancing regulatory compliance with innovation will determine the future trajectory of India's digital economy.

Conclusion: Strategic Approach to Compliance

The DPDP Act represents a transformative shift in India's approach to data governance. Organizations that prioritize compliance alongside technological advancement will be best positioned to thrive in this evolving regulatory environment.

Action Items for Businesses

To stay ahead of the compliance curve, companies should:

1. Assess current data governance frameworks against forthcoming requirements

2. Invest in comprehensive compliance training for all relevant personnel

3. Engage with industry bodies to address concerns proactively

4. Participate in the consultation process to ensure readiness for the regulatory future

Expert Guidance Available

Have insights or concerns about the DPDPA Rules? Join the conversation and share your thoughts with us!

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