Brace Yourselves: The Game-Changing Impact of India's DPDP Act, 2023

India’s Digital Personal Data Protection (DPDP) Act, 2023 is a turning point in how personal data is regulated, managed, and protected across the country. As every industry becomes more digital, this law makes it clear who owns data and who must protect it.

The Act introduces a legal imperative and an operational opportunity for SOC managers, CISOs, DPOs, and IT security teams to revisit how data is collected, stored, shared, and protected.

Penalties for non-compliance are hefty, up to ₹250 crore (almost $30M) for each contravention, making the Act among the most stringent data protection regimes globally. But beyond fines, this is a defining moment to reframe data privacy as a foundation for trust in the digital economy.

Key Requirements: What the DPDP Act 2023 Demands

At its heart, the DPDP Act is built on three main ideas: collect only the data you need, use it only for clear reasons, and always get the user’s consent. Here’s a simple look at what the law requires:

• Consent-Based Processing: Organizations, or “Data Fiduciaries,” must get clear, affirmative consent from individuals (“Data Principals”) before collecting and processing personal data. Consent needs to be informed, specific, and revocable.
• Notice Requirements: Entities must issue privacy notices in clear language describing the type of information gathered, how it is being used, and the rights of the data principal.
• Data Principal Rights: Data principals have certain rights to access, correct, and erase their personal data. They also have the right to designate a representative in case of incapacity or death.
• Data Breach Notification: Data fiduciaries must notify the Data Protection Board, as well as the affected individuals, should a breach of personal data happen.
• Cross-Border Data Transfers: While permitted, these will be subject to government-approved whitelist countries.
• Data Protection Officer (DPO): Significant Data Fiduciaries (SDFs) or those charged with handling large volumes of sensitive data must appoint a DPO based in India who reports to senior management.
• Privacy by Design: Companies are expected to embed privacy into product and service development from the outset and throughout.

Implications for Organizations: Operational and Strategic Shifts

The DPDP Act requires a structural rethinking of data governance for Indian businesses. Many entities, particularly mid-sized firms and legacy enterprises, may find themselves underprepared.

• Increased Accountability: With a legal framework now holding organizations directly responsible for data misuse or breach, internal data governance needs a revamp. This includes defining ownership, enforcing accountability, and monitoring data flows.
• Risk of Overlap and Role Confusion: Many companies are currently merging the roles of Chief Information Security Officer (CISO) and DPO. But the Act clarifies that these roles have distinct mandates (security versus legal compliance and rights protection, requiring dedicated personnel and expertise).
• Vendor Management Complexity: The Act’s focus on third-party risk (particularly in data supply chains) means that firms must secure their own systems and also audit and monitor their vendors’ data protection policies.
• Technology and Infrastructure Investments: Consent management platforms, real-time data mapping, breach detection, and logging mechanisms will need to be built or retooled to comply with new standards.

Compliance Strategies: From Theory to Implementation

A phased, risk-based approach is key for firms in this new landscape. Here’s how IT and security leaders can operationalize compliance:

1. Start with a Gap Analysis: Assess existing data practices against the requirements of the DPDP Act. Pinpoint high-risk areas, especially those related to consent, sensitive personal data, and cross-border transfers.
2. Form a Cross-Functional Team: Bring together people from legal, compliance, IT, security, product, and customer service. Privacy can’t live in one corner; it must be part of every team’s work.
3. Assign a Dedicated DPO: For bigger companies, the Data Protection Officer should have their own role, not just added to the CISO’s duties. A good DPO guides the company on the law and keeps watch to make sure data is used fairly and legally.
4. Build Consent and Preference Management Infrastructure: Capture, manage, and audit consent across every touchpoint, websites, apps, call centers, and more. Make sure users can easily revoke or modify consent.
5. Implement Privacy by Design: Build security and privacy into products from the start. This means using automated tools to limit data collection, defining clear purposes for data use, and giving users control over their information.
6. Prepare for Incident Response: Set up a clear plan for handling data breaches. This should include steps for internal alerts, reporting to authorities, and communicating with affected customers, all within the required deadlines.
7. Stay Informed and Adaptive: Keep track of new rules under the DPDP Act, such as the expected 2025 Draft Rules. Be ready to update your practices as the government releases new guidance.

A New Era of Data Responsibility

The DPDP Act is a call to change data stewardship in a digital India. Moving from defensive compliance to active governance, businesses will limit legal liability and boost consumer confidence, business resilience, and competitive advantage.

The DPDP Act will be a foundation for India’s broader digital regulatory framework, including the upcoming Digital India Act and sector-specific rules from regulators like the RBI, SEBI, and IRDAI.

For IT and security professionals, adopting the DPDP Act now is key to preparing for a future that demands greater regulation, transparency, and trust in the digital age.

Editor’s Note: The opinions expressed in this and other guest author articles are solely those of the contributor and do not necessarily reflect those of Fortra.