What are the implications of the DPDPA for businesses collecting your data in India?

In a time where data is as valuable as currency, businesses across India have thrived by collecting, analyzing, and monetizing personal data. But with the enactment of the Digital Personal Data Protection Act (DPDPA), 2023, a seismic shift is occurring in how companies handle this responsibility.

Gone are the days when companies could bury their data practices in unreadable terms and conditions. The DPDPA introduces a clear legal framework that prioritizes user consent, transparency, accountability, and protection, while forcing businesses to rethink their entire data strategy.

Let’s explore what the DPDPA means for businesses and, more importantly, how it empowers you—the user—to control how your personal data is collected and used.

Understanding DPDPA: A Quick Primer

The Digital Personal Data Protection Act (DPDPA), 2023 is India’s first comprehensive law designed to regulate the use of personal data. It aligns with global best practices like the EU’s GDPR and represents a milestone in India’s journey toward a more privacy-centric digital economy.

Key Concepts:

  • Data Fiduciary: The business or organization that collects and processes personal data.

  • Data Principal: The individual (you) to whom the data belongs.

  • Consent: Must be informed, specific, clear, and revocable.

  • Data Protection Board: The central authority overseeing compliance and addressing grievances.

Implications of DPDPA for Businesses

1. Mandatory Informed Consent

Before a business collects your data, it must provide a clear, accessible, and language-friendly notice explaining:

  • What data is being collected.

  • Why it’s needed (purpose).

  • Who it will be shared with.

  • How long it will be retained.

🟢 Public Example: When you install a mobile wallet app, it can no longer request access to your contacts, location, and messages by default. It must first ask your permission—clearly and transparently.

👉 Impact on Business: Companies must redesign user journeys, app flows, and web forms to include legally compliant consent notices. Consent cannot be bundled or ambiguous anymore.

2. Data Minimization and Purpose Limitation

Businesses can only collect data necessary for the declared purpose—nothing more. This restricts unnecessary, excessive, or vague data collection.

🟢 Public Example: A clothing website asking for your gender and address for delivery is acceptable. But if it asks for your date of birth, Aadhaar number, and income without justification, that’s a red flag.

👉 Impact on Business: Companies will need to audit existing data practices, discard irrelevant or excess data, and limit future data collection accordingly. It’s a shift from “collect everything, analyze later” to “collect what’s justified.”

3. User Rights and Grievance Redressal

Under DPDPA, every user has clear rights:

  • Right to access data.

  • Right to correct inaccurate data.

  • Right to erase data.

  • Right to withdraw consent.

  • Right to grievance redressal through a Data Protection Officer or the Data Protection Board.

🟢 Public Example: If you unsubscribe from a shopping app, you can request the deletion of all your past orders and profile data. If the company refuses, you can escalate it to the Data Protection Board of India.

👉 Impact on Business: Companies must set up proper customer-facing systems and internal workflows to respond to data access, correction, or deletion requests within a reasonable time. Non-compliance can lead to penalties.

4. Data Breach Notification Obligations

If there is a data breach—like a cyberattack that leaks your personal data—the company must inform both the affected individuals and the Data Protection Board as soon as possible.

🟢 Public Example: If a ride-hailing app suffers a data leak, exposing users’ location histories and phone numbers, it must disclose the breach, list the affected data, and provide guidance to users on how to stay safe.

👉 Impact on Business: Companies will need robust cybersecurity infrastructure, data incident response plans, and reporting mechanisms to comply. This also includes conducting regular security audits and risk assessments.

5. Obligations for Significant Data Fiduciaries

Businesses that handle large volumes of personal data or process sensitive personal data (like health, finance, biometrics) may be classified as Significant Data Fiduciaries (SDFs). These businesses have extra responsibilities:

  • Appoint a Data Protection Officer (DPO).

  • Conduct Data Protection Impact Assessments (DPIAs).

  • Perform regular audits and compliance reporting.

🟢 Public Example: A leading hospital chain or large fintech app processing lakhs of user health and financial records would likely be classified as an SDF.

👉 Impact on Business: These businesses will need to invest in dedicated privacy teams, legal advisors, secure cloud storage, and strong authentication protocols to meet elevated compliance standards.

6. Cross-Border Data Transfer Regulations

DPDPA allows businesses to transfer personal data outside India, but only to countries notified by the government as compliant with India’s data protection standards.

👉 Impact on Business: Companies using foreign cloud service providers or analytics tools must ensure their data transfer contracts are updated and follow government-approved country lists. Otherwise, they risk violating the law.

7. Severe Financial Penalties for Non-Compliance

The DPDPA imposes hefty penalties—up to ₹250 crore—for:

  • Failing to protect data from breaches.

  • Collecting or processing data without consent.

  • Ignoring grievance redressal obligations.

👉 Impact on Business: Data protection is now a compliance risk, just like tax or labor law. Non-compliance not only invites legal action but also damages public trust and brand reputation.

How Can the Public Use This Law?

The DPDPA empowers every Indian internet user with tools to hold companies accountable:

✅ Ask Questions Before Sharing Data

“Why do you need my Aadhaar card?”
“Who else can access my information?”

You have a legal right to know.

✅ Request Data Erasure

If you’ve stopped using an app or website, you can email their grievance officer to delete your personal data.

✅ Report Violations

If you believe a company has:

  • Misused your data,

  • Failed to respond to your access/erasure request,

  • Not disclosed a data breach—

You can file a complaint with the Data Protection Board of India (soon to be functional under the Act).

Practical Example: A Shopping App Before and After DPDPA

🔴 Before DPDPA:

  • App requests access to contacts, photos, location—even when not needed.

  • Vague terms and conditions—users have no idea how data is used.

  • No option to delete profile or request data access.

🟢 After DPDPA:

  • App shows a clear privacy notice: what data is collected and why.

  • Users can opt out of personalized ads and request data deletion.

  • Contact info of grievance officer is available.

  • Data shared only with authorized partners, and securely stored.

Conclusion

The DPDPA represents a transformational moment for digital privacy in India. For businesses, it’s a wake-up call to put users first, build ethical data practices, and prioritize transparency. For individuals, it’s a powerful shield to take back control over personal information that was too often taken for granted.

Businesses that fail to adapt will not just face penalties—they will lose consumer trust in an era where privacy is becoming a competitive advantage.

As a citizen and internet user, you are no longer powerless. You have the legal right to ask, know, deny, and protect. Because in the world of data, your consent is your signature, and your awareness is your armor.

rahulsharma

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