India nears a data privacy milestone: What 2025 draft DPDP rules signal for the future

In a significant stride toward securing the digital rights of over a billion citizens, the Ministry of Electronics and Information Technology (MeitY) has unveiled the draft Digital Personal Data Protection (DPDP) Rules, 2025 for public consultation. These long-awaited rules aim to operationalise the Digital Personal Data Protection Act, 2023 (DPDPA), and in doing so, mark the dawn of India’s privacy-first era.

The draft rules arrive at a time when India's data economy is expanding at an unprecedented pace. With millions of users engaging with fintech apps, e-commerce platforms, health services, and social networks, the absence of detailed, enforceable privacy standards has been a glaring gap, one that the DPDP Rules now attempt to bridge.

From Policy to Practice: Turning Law into Infrastructure

The release of the DPDP Rules moves India from high-level policy to granular operational reform. At the core of the rules lies a phased implementation strategy, beginning with the constitution of the Data Protection Board of India, the regulatory body empowered to investigate complaints and enforce penalties.

In the initial phase, the government will appoint board members, establish operating procedures, and lay down governance codes. However, the real transformation will unfold in how businesses interpret and internalize these changes, particularly as they prepare for more rigorous accountability standards.

Consent and User Rights: New Foundations of Digital Engagement

The rules introduce sweeping changes to how personal data is collected and processed. Businesses must now secure explicit, informed, and itemised consent from users before collecting their data. Consent forms will need to answer fundamental questions:

• What data is being collected?
• Why is it being processed?
• Who else will access it?
• What rights does the individual have?

This pivot from passive “opt-out” models to “opt-in by design” makes user agency central to data governance.

The implications are wide-reaching. Platforms across sectors, whether a payment app or an ed-tech startup, must now redesign their data intake interfaces for transparency and clarity, a change that is both a compliance mandate and a user experience challenge.

Security Standards Elevated to Law

In aligning with international benchmarks such as the EU’s GDPR, the draft rules place legally enforceable obligations on data security. These include:

• End-to-end data encryption
• Role-based access protocols
• Breach reporting within 72 hours
• Data masking and anonymisation

Such provisions are no longer IT best practices, they are binding duties. Significantly, companies must also extend these standards to third-party vendors, raising the bar for the entire digital supply chain.

For sectors like fintech, healthtech, and e-commerce, this is a clear directive to elevate their cybersecurity investments or risk reputational and regulatory fallout.

Responsibilities Redefined for Data Fiduciaries

The rules assign differential responsibilities based on an entity’s data processing footprint. Significant Data Fiduciaries (SDFs) - large-scale processors of sensitive data, will be subject to enhanced scrutiny. Obligations include:

• Appointment of a Data Protection Officer (DPO), based in India
• Annual Data Protection Impact Assessments (DPIAs)
• Publication of transparent data handling policies
• Algorithmic accountability in automated decision-making

Furthermore, SDFs must limit their data retention to no more than three years unless legally justified. This move is likely to affect sectors like online gaming and digital commerce, where long-term data storage has traditionally gone unregulated.

Protecting Children and Guarding Borders

For minors, the draft rules offer heightened protections. Organisations must acquire verifiable parental consent to process any data relating to children and are strictly prohibited from using such data for targeted advertising or profiling.

The draft also strengthens rules around cross-border data transfers, indicating that Indian personal data cannot be freely exported unless explicitly permitted by the government. This provision will impact foreign cloud service providers and cross-border SaaS platforms operating in India.

Consent Managers: A Structural Innovation

Among the most forward-thinking inclusions is the formalisation of Consent Managers, neutral, regulated entities that allow users to manage and withdraw data permissions across multiple platforms. These managers will serve as intermediaries, ensuring users don’t get trapped in confusing or exploitative data practices.

The model promises to democratise data control and minimise "consent fatigue," a long-standing concern in digital ecosystems.

Ambiguities That Still Need Addressing

Despite the progressive tone, several areas in the draft rules leave room for clarification:

• Will businesses need to re-obtain consent from users whose data was collected before DPDPA enforcement?
• What are the financial or operational thresholds for classifying a Significant Data Fiduciary?
• How will Consent Managers be certified, and what safeguards will govern their operations?

Industry observers expect MeitY to release explanatory notes and possibly sector-specific guidelines following the current public consultation phase.

What This Means for Businesses

For India Inc., the message is clear: privacy must become part of product design and strategy, not a post-launch add-on. Organisations must audit their existing data stacks, prepare for real-time consent workflows, and educate their teams on compliance literacy.

Startups and mid-sized businesses, in particular, must balance agility with accountability. Ignoring the rules may invite not just penalties but also public backlash and eroded trust.

With the draft DPDP Rules, India inches closer to embedding digital trust into its policy fabric. The real challenge lies in execution, building infrastructure, processes, and ethics that reflect not just compliance, but user empowerment.

Those who act early will find themselves not just in the good books of regulators but in the hearts of users who increasingly value privacy in a hyper-connected world.

Written By - Mr. Vaibhav Yadav, Head of Product at OnGrid & Gridlines

Read More:

Canon India's Print Strategy: AI, Sustainability & Partner Growth with C Sukumaran

PM Modi's Festive Bonanza - What next-gen GST reforms mean for Indian MSMEs

Backup as a Service in India rises as DPDPA reshapes data protection

Backup as a Service: Decoding India’s opportunity and reality