The way Indian businesses handle personal data is undergoing a major transformation. With the enactment of the Digital Personal Data Protection Act, 2023 (DPDP Act), India has introduced its first comprehensive data privacy law. If your business collects, processes, or stores personal data digitally, compliance with the DPDP Act is now a legal requirement.

This guide breaks down the essentials of the DPDP Act—what it is, who it applies to, the key provisions, penalties, and most importantly, how your business can stay compliant.

What is the DPDP Act 2023?

Passed in August 2023, the DPDP Act regulates the collection, processing, and storage of digital personal data in India. Modeled in part after the EU’s GDPR, it addresses the growing need for privacy in the country’s digital ecosystem.

Key Highlights:

  • Scope: Applies to all digital personal data, whether collected online or digitized offline.
  • Who It Covers: Indian and foreign companies offering goods or services in India.
  • Regulator: The Data Protection Board of India (DPBI) enforces compliance.
  • Consent-Focused: Requires explicit and informed user consent before data collection.
  • Limited Use: Data can only be used for the purpose for which it was collected.

Read the official DPDP Act notification on MeitY.gov.in

Who Must Comply with the DPDP Act?

Any organization that processes digital personal data falls under the category of Data Fiduciary.

Entities Required to Comply:

  • IT service providers
  • SaaS platforms
  • E-commerce businesses
  • EdTech and HealthTech firms
  • Financial institutions
  • Government departments

Significant Data Fiduciaries (SDFs):
Organizations dealing with large volumes or sensitive data have additional responsibilities:

  • Appoint a Data Protection Officer (DPO)
  • Conduct regular Data Protection Impact Assessments (DPIAs)

Key Provisions Under the DPDP Act

Manage Consent the Right Way

  • Consent must be specific, informed, and freely given.
  • Use Consent Managers for streamlined user control.
  • Allow users to withdraw consent at any time.

Know the Rights of Data Principals

  • Access personal data
  • Request corrections or deletions
  • Data portability
  • File complaints with the Data Protection Board

Understand Your Duties as a Data Fiduciary

  • Maintain transparency and accuracy of data
  • Use data only for the intended purpose
  • Ensure robust security and timely breach notification

DPDP vs GDPR: A Clear Comparison for Indian Companies

Although inspired by the GDPR, the DPDP Act includes several India-specific provisions that businesses must understand.

 

How to Ensure DPDP Compliance: A Step-by-Step Business Guide

  1. Start with a Comprehensive Data Audit
  • Identify what personal data you collect
  • Understand how and where it is stored and shared
  1. Update Your Privacy Policy
  • Clearly outline what data is collected and why
  • Reflect user rights and consent requirements
  1. Implement Consent Management Tools
  • Provide clear, opt-in consent options
  • Allow users to view and revoke consent anytime
  1. Train Your Employees
  • Educate staff on data privacy responsibilities
  • Set up internal processes to handle user requests
  1. Appoint a DPO (for SDFs)
  • Ensure there is a designated point of contact for compliance
  • The DPO will liaise with regulators and manage assessments
  1. Establish a Data Breach Response Plan
  • Monitor systems for breaches
  • Notify the DPBI and affected users promptly

 

Sector-Wise Impact of the DPDP Act: IT, SaaS, Startups & More

Icon representing DPDP compliance for Indian IT and SaaS companies

For IT & SaaS Companies

  • Must ensure vendor and processor compliance
  • Build scalable and automated consent workflows

For E-commerce Platforms

  • Clearly disclose how data is used at login and checkout
  • Offer easy opt-out and deletion options

For Healthcare & FinTech

  • Likely to be categorized as SDFs
  • Must conduct DPIAs and implement advanced security controls

For Startups

  • No exemption for small or early-stage companies
  • DPDP compliance can boost investor confidence and credibility

Penalties for Non-Compliance Are High

Violating the DPDP Act can lead to heavy fines:

  • Up to ₹250 crore for failing to prevent data breaches
  • Up to ₹200 crore for not reporting breaches on time
  • Up to ₹50 crore for refusing to honor user rights

The Data Protection Board of India is authorized to investigate, conduct hearings, and impose these penalties.

Your Roadmap to DPDP Readiness Starts Now

Following the DPDP Act isn’t just about avoiding penalties—it’s about building consumer trust and future-proofing your business.

Here’s what you can do:

  • Schedule a DPDP Readiness Assessment
  • Update internal policies and customer-facing notices
  • Implement a secure, consent-based data management system
  • Consult data privacy experts to ensure long-term compliance
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Let Us Help You Get DPDP Compliant

We assist businesses in navigating India’s data privacy laws with:

  • End-to-end compliance audits
  • Custom consent management systems
  • Policy drafting and employee training

📥 Discover more about the DPDP Compliance Checklist right now!

 

Contact us at support@virtrigo.com to book your consultation and protect your business from data risks.