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Digital Personal Data Protection Act (DPDP)

Documentation Updated: 2025-03-09

Description

Digital Personal Data Protection Act

The Digital Personal Data Protection Act (DPDP Act) 2023 is India’s comprehensive framework for protecting digital personal data. It emphasizes a consent-based approach to data processing while promoting transparency, accountability, and data security. The Act aims to safeguard individual privacy in a rapidly digitizing economy and to set standards for responsible data management.

Scope & Applicability

The DPDP Act applies to digital personal data processing within India and to data processed by entities outside India if the data concerns Indian residents.

  • Covered Entities: Data fiduciaries and processors of all sizes engaged in handling digital personal data.
  • Data Types: Digital personal data, including sensitive categories that require enhanced consent and protection.
  • Key Exemptions: Data processed for personal, domestic purposes, and certain government functions such as law enforcement.

Key Requirements

Organizations must obtain informed consent, provide transparent privacy notices, and implement robust data security measures:

  • Obtain free, specific, and informed consent prior to data processing.
  • Allow data subjects rights to access, correct, and delete their data.
  • Special Focus Areas:
    • Consent Management: Ensure clear, user-friendly mechanisms for obtaining and revoking consent.
    • Data Security: Implement encryption, access controls, and regular risk assessments.
  • Additional Focus: Mandatory breach notification and ongoing accountability through periodic reviews.

Impact on LLM/AI Deployments

For AI systems handling Indian personal data, the DPDP Act mandates privacy and security by design:

  • Data Processing: AI systems must use personal data only for explicitly consented purposes.
  • Model Training: Prefer anonymized or pseudonymized data to reduce privacy risks.
  • Automated Decisions: Provide transparency in AI-driven decisions and enable human oversight.
  • Security and Observability Considerations:
    • Access Management: Restrict access to personal data in AI systems.
    • Audit Logging: Maintain logs of data usage in AI pipelines.
    • Continuous Monitoring: Use monitoring tools to detect unauthorized access or breaches.
    • Incident Response: Develop clear protocols for breach notification.
    • Compliance Audits: Regularly review AI system practices for alignment with the DPDP Act.

Enforcement & Penalties

The DPDP Act is enforced by the Data Protection Board of India, which can impose severe fines for non-compliance.

  • Enforcement Body: Data Protection Board of India.
  • Fines and Penalties:
    • Major Violations: Fines can reach hundreds of crores for serious breaches.
    • Administrative Sanctions: Additional corrective actions may be mandated.
  • Additional Enforcement Mechanisms: Regular audits and public reporting of violations.
  • Operational Impacts: Non-compliance can lead to significant business disruptions and reputational harm.

Resources & References