What India's Digital Personal Data Protection Bill means for businesses

This article was originally published in May 2023 and has been updated to reflect recent progress toward passage by the Indian Parliament.

On November 18, 2022, India’s Ministry of Electronics and Information Technology (MeitY) introduced the Digital Personal Data Protection Bill (DPDP) for public consideration. This updated version represents a major shift from earlier drafts, proposing a comprehensive data protection framework while easing some restrictions on non-personal data and cross-border data transfers.

While the bill is more business-friendly in certain respects, it also introduces significant penalties for non-compliance, including fines of up to ₹500 crore. These provisions apply to both private and government entities. Additionally, individuals will gain the right to access details about how their personal data is collected, stored, and processed.

Currently, data protection in India is governed by the IT Act (2008) and SPDI Rules (2011), but the new law will significantly expand compliance obligations. Organizations must begin preparing now, as transitioning to the new regime will require both technological investment and operational changes.

Four Key Steps to Prepare for DPDP Compliance

1. Maintain a Defensible Data Inventory

Organizations must know:

• Where their data resides
• Who has access to it
• Who is responsible for managing it

Without this visibility, compliance becomes nearly impossible. A centralized and well-maintained data inventory enables organizations to:

• Respond to regulatory requirements
• Identify vulnerabilities
• Demonstrate accountability

Technology—especially scalable, automated tools—is essential for managing large and complex data environments.

2. Manage Data Subject Access Requests (DSARs)

The DPDP bill grants individuals the right to:

• Access their personal data
• Understand how it is processed
• Request deletion of their data

To comply, organizations must implement systems that can:

• Intake and authenticate requests
• Locate and compile relevant data across systems
• Review and redact sensitive information
• Fulfill requests efficiently

Manual processes are too slow and error-prone. Automated solutions can complete these tasks in minutes, ensuring compliance and reducing operational burden.

3. Manage Third-Party Risk

Organizations are accountable for how third parties handle personal data. With increasing reliance on cloud services and outsourced operations, this is a major risk area.

To stay compliant, businesses must:

• Identify which vendors have access to data
• Assess how data is being used and protected
• Ensure third parties meet required security standards

Improved visibility and monitoring of vendor activity are critical to reducing risk and avoiding penalties (which can reach ₹250 crore for inadequate safeguards).

4. Adopt Data Retention and Minimization Policies

The DPDP bill mandates that organizations:

• Retain personal data only as long as necessary
• Delete data once its purpose is fulfilled (with some regulatory exceptions)

Effective data minimization:

• Reduces exposure to cyberattacks
• Limits legal and regulatory risk
• Simplifies compliance efforts

However, balancing retention requirements across multiple regulations can be complex. Technology can help automate decisions by identifying data subject to legal holds or other obligations.

Final Takeaway

India’s evolving data protection landscape demands proactive action. Organizations that delay preparation risk facing steep penalties, operational disruption, and reputational damage.

By focusing on:

• Data visibility
• Efficient request handling
• Third-party risk management
• Strong retention and minimization policies

—and leveraging modern technology like AI and automation—businesses can build scalable, compliant, and future-ready data protection programs.

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