
Introduction
In August 2023, India witnessed a pivotal shift in its data privacy regulatory landscape with the enactment of the Digital Personal Data Protection Act, 2023 (“DPDP Act“). The DPDP Act provides a comprehensive set of guidelines that must be adhered to when managing digital personal data, ensuring the protection of individuals’ privacy rights while balancing legitimate business needs and government requirements. The publication of the Draft Digital Personal Data Protection Rules, 2025 (“Draft DPDP Rules“) marks another significant legal development that is anticipated to further reinforce data privacy norms in India.
Obhan & Associates has previously published articles on the subject of data privacy and technology, the details of which are provided below:
- A Study on the Digital Personal Data Protection Bill, 2023: In this article, we analyzed the key provisions of the Digital Personal Data Protection Bill, 2023, highlighting its implications for data processing and protection in India.
- Examining the Draft Digital Personal Data Protection Rules, 2025: We examined the Draft Digital Personal Data Protection Rules, 2025, discussing their role in operationalizing the DPDP Act and the potential impact on data fiduciaries.
- Consent Requirements under the Draft DPDP Rules: A Comparison with the Provisions of the GDPR: We analyzed the consent provisions of India’s Draft Digital Personal Data Protection Rules, comparing them with the European Union’s General Data Protection Regulation to highlight similarities and differences in data protection frameworks.
- Legal Perspectives on AI Governance in India: A Summary of the AI Governance Guidelines Report: This article provided an overview of the AI Governance Guidelines Report, outlining India’s approach to addressing legal and ethical challenges in AI development.
- AI in the Spotlight: Insights from MeitY’s Latest Advisory: We discussed the Ministry of Electronics and Information Technology’s advisory on AI, focusing on its implications for intermediaries under the Information Technology Act and Rules.
With India celebrating Data Privacy Week from January 27 to January 31, 2025, this article explores key trends that will shape the future of data privacy in the country. Some of the most significant trends include the growing use of artificial intelligence (“AI“)-powered data protection tools, the rising adoption of privacy-enhancing technologies (“PETs“), the impact of global data governance regulations on Indian businesses, and the need for strengthening internal privacy governance frameworks by businesses.
Recent Trends in Data Privacy
The DPDP Act prescribes obligations for entities which determine the purpose and manner in which personal data is managed and processed (“Data Fiduciaries“). These obligations include implementing adequate administrative and technical measures to ensure data security and prevent breaches. In this regard, there is a rising trend among Data Fiduciaries to adopt AI-based data security solutions. These AI solutions have the capacity to continuously monitor data handling processes, identify unusual activities, and predict potential security breaches.
In addition to use of AI solutions, India has also witnessed a growing adoption of PETs as part of compliance strategies under the DPDP Act. PETs such as data anonymization and encryption measures enable Data Fiduciaries to process personal data while also maintaining security and confidentiality. As mandated by the DPDP Act, Data Fiduciaries are required to implement reasonable security safeguards to prevent personal data breaches, and PETs serve as effective tools to meet these obligations.
Key Considerations for Compliance
While AI solutions offer advantages such as improved compliance and cost efficiency, there are concerns regarding their transparency and fairness. Since India currently lacks specific regulations governing use of AI in securing personal data, Data Fiduciaries must take a cautious approach to avoid algorithmic bias and ensure their AI systems align with ethical and regulatory standards.
Data Fiduciaries must also keep in mind that one of the most important aspects of the DPDP Act is its extraterritorial reach. Any business, regardless of where it is based, must comply with the DPDP Act if it is engaging in the processing of data of individuals from India. The provision which establishes the extraterritorial application of the DPDP Act mirrors the European Union’s General Data Protection Regulation. Data Fiduciaries operating in India as well as abroad must navigate complex legal obligations to ensure compliance with the DPDP Act. Since the law only permits cross-border data transfers under strict conditions designed to protect individuals’ rights, it is crucial for organizations to stay informed about ongoing changes in both Indian and global data privacy regulations to avoid legal pitfalls.
The Road Ahead: Challenges and Opportunities
The DPDP Act has far-reaching implications for various industries, particularly those that rely heavily on personal data, such as healthcare, finance, e-commerce, and technology. Healthcare providers must implement rigorous measures to protect sensitive patient data, while financial institutions face additional compliance requirements, such as strict Know Your Customer (KYC) guidelines. For e-commerce platforms, ensuring that the user provides “free, specific, informed, unconditional and unambiguous” consent and maintaining transparency in data collection practices is now more important than ever.
Adapting to the DPDP Act’s requirements and ensuring strict compliance also comes with challenges for small and medium-sized enterprises (SMEs). There is a high cost associated with implementing robust data security measures, managing cross-border data flows, and hiring skilled data privacy professionals. To navigate these challenges, businesses must explore cost-effective compliance solutions while staying informed about legal updates. Moving forward, Data Fiduciaries must adopt tailored, cost-effective strategies to meet the compliance obligations, as it is expected that the government will introduce sector-specific guidelines in the future.
In addition to the above, Data Fiduciaries must keep in mind that Indian consumers are becoming increasingly aware of their data privacy rights, as the DPDP Act grants individuals the right to access, correct, and erase their personal data. Data Fiduciaries are obligated to respect the rights granted under the DPDP Act and provide clear, transparent information about their data processing practices. Failure to comply can lead to significant legal penalties, reputational harm, and a loss of consumer trust.
While the DPDP Act has set a solid foundation for data privacy in India, the regulatory landscape is expected to continue evolving. The government is likely to introduce additional sector-specific guidelines, compliance toolkits, and clarifications through supplementary regulations. Businesses must remain agile and proactive in adopting evolving best practices to ensure they stay compliant in the still-evolving data privacy landscape.
Conclusion
India’s DPDP Act has positioned the country as a key player in the global data privacy movement, bringing its regulatory framework in line with international standards. However, businesses must proactively adapt to these changes by leveraging advanced technologies, strengthening their internal privacy frameworks, and staying informed about emerging legal developments. By taking the right steps to comply with the Act, organizations can not only mitigate legal risks but also build trust and credibility among consumers in today’s data-driven world.