DPDP Act Explained: What Every Business Needs to Know

Digital Personal Data Protection Act (DPDP Act) is India’s comprehensive law governing the processing of digital personal data, balancing individuals’ rights to privacy with the need for lawful data use. It sets obligations for data handlers and rights for citizens.

“India saw over 67,000 data breach incidents in 2023 alone.”

As cyber threats rise, protecting customer data is no longer just an IT problem — it's a business imperative.

The Digital Personal Data Protection (DPDP) Act, introduced in 2023, is India’s first comprehensive law focused on safeguarding personal data. It marks a turning point for how businesses collect, store, and use consumer information.

Whether you're a small business, a regional dealership, or a large OEM brand, DPDP applies to you. And that includes your partners, agencies, and third-party vendors. A single weak link in your vendor chain could expose sensitive customer data — and the law will hold you accountable.

In this blog, we’ll break down what the DPDP Act means in simple terms, how it affects your operations, and how you can stay compliant — especially if you're outsourcing marketing, lead generation, or customer engagement.

What is the DPDP Act?

The Digital Personal Data Protection (DPDP) Act, 2023 is India’s landmark legislation aimed at protecting the privacy of its citizens in the digital age. It establishes a clear legal framework for how businesses must handle personal data — from collection to processing, storage, and sharing.

At its core, the DPDP Act is designed to safeguard the rights of individuals, also known as Data Principals, by ensuring their data is used fairly, transparently, and securely.

Key Highlights

Purpose: To protect personal data and empower individuals with control over their own information.

Who It Applies To:

- All businesses operating in India

- Foreign companies handling the personal data of Indian citizens

- Startups, agencies, and even small dealerships or franchises

No matter your size or sector, if you collect names, emails, phone numbers, or any personal data from Indian residents — this law applies to you.

Key Terms to Know in the Digital Personal Data Protection (DPDP) Act

To understand your responsibilities under the Digital Personal Data Protection Act (DPDP Act), it's essential to get familiar with some foundational terms. These roles define who is responsible for what — and who is liable when something goes wrong.

1. Data Principal

The individual whose personal data is being collected. This could be a customer filling out a lead form, a visitor booking a test drive, or anyone sharing their information with a business.

2. Data Fiduciary

The business or entity that determines the purpose and means of processing personal data. This includes dealerships, OEMs, ecommerce platforms, agencies — anyone making decisions about how data is collected and used.

“Under the DPDP Act, the Data Fiduciary is held accountable, even if a third-party vendor mishandles the data.”

3. Data Processor

A third party that processes personal data on behalf of the Data Fiduciary. This could be a marketing agency, CRM provider, or call center partner. While they carry responsibility, legal liability often rests with the Data Fiduciary.

Understanding these terms is crucial, especially when outsourcing operations. You can outsource execution — but not accountability under the Digital Personal Data Protection Act.

Gain more insights with this short and informative video. "Consent and Compliance: Navigating Privacy in Retail Marketing"
 

What the DPDP Act Requires from You

The Digital Personal Data Protection Act (DPDP Act) lays down specific responsibilities for businesses — whether you're collecting leads from a website, managing customer databases, or running marketing campaigns through a third party.

Here’s what the DPDP Act expects every Data Fiduciary to follow:

1. Clear and Informed Consent

You must obtain explicit consent from users before collecting their personal data. This consent must be informed, specific, and freely given — no more burying terms in fine print.

2. Purpose Limitation

Use the data only for the specific purpose for which the user gave consent. For example, if someone shares their data to schedule a test drive, you can’t reuse it for unrelated promotions.

3. Data Minimization

Only collect data that is strictly necessary for your intended purpose. If you don’t need someone’s date of birth, don’t ask for it.

4. Storage Limitation

Don’t keep data longer than needed. The Digital Personal Data Protection Act enforces data lifecycle management — delete what you no longer require.

5. Accountability

Even if your vendor stores or processes the data, you — the Data Fiduciary — are responsible. If a third-party agency mishandles customer information, you still bear the legal risk under the DPDP Act.

Compliance with the Digital Personal Data Protection Act isn’t optional. It’s a legal mandate that applies to every business handling the personal data of Indian citizens.

Failing to meet these obligations can result in hefty penalties, data breaches, and long-term brand damage.

Explore more valuable insights about DPDP Act with this enlightening article ”Digital Personal Data Protection Act 2023 – A game changer” from the Times of India, offering a wealth of information to expand your understanding.

Why You Can’t Afford to Ignore the Digital Personal Data Protection Act 

Ignoring the Digital Personal Data Protection Act (DPDP Act) can cost more than just money - it can damage your brand’s reputation, erode customer trust, and invite serious legal consequences.

1. Hefty Penalties

Under the DPDP Act, businesses can face fines of up to ₹250 crore for non-compliance. Even a single breach caused by a vendor or internal oversight can trigger these penalties.

2. Reputation at Risk

A data leak doesn’t just make headlines - it breaks the trust you’ve built with your customers. Once sensitive information is compromised, regaining credibility is difficult and costly.

3. Vendor Blind Spots

OEMs and dealers often outsource lead generation, marketing, or data handling to third-party vendors - but fail to ensure DPDP compliance across the chain. When these vendors mishandle data, it’s your brand that takes the fall.

“Under the Digital Personal Data Protection Act, you can’t blame the vendor. The law holds the Data Fiduciary - you - accountable.”

This makes it critical for all businesses, especially in automotive, retail, and e-commerce, to evaluate vendor practices, sign Data Processing Agreements (DPAs), and set up regular audits.

Ignoring your responsibilities under the Digital Personal Data Protection Act is like sitting on a ticking time bomb.

Real-World Relevance: The OEM–Vendor Risk Chain and the DPDP Act

In today’s digital ecosystem, your data security is only as strong as your weakest vendor. And under the Digital Personal Data Protection Act (DPDP Act), that weakness can become your liability.

1. One Weak Link = Total Exposure

- A marketing agency running a lead-gen campaign.

- A call center following up with unmasked customer data.

- A vendor storing emails and phone numbers in unsecured spreadsheets.

It only takes one non-compliant partner to cause a data breach, and when that happens, you — the Data Fiduciary — are liable under the DPDP Act.

2. The OEM-Dealer-Vendor Chain

Even if a dealer runs the campaign and the vendor mishandles the data, the presence of the OEM’s logo on the landing page can implicate the brand. This branding association pulls OEMs into legal scrutiny, especially under Digital Personal Data Protection regulations.

3. Reputational Risk Is Shared

In such cases, reputation loss isn’t just limited to the dealer. The OEM can also suffer public backlash, customer distrust, and possible fines — despite not being directly involved in execution.

“The DPDP Act makes data protection a shared responsibility — but places legal accountability squarely on the Data Fiduciary, regardless of delegation.”

That’s why businesses across sectors must vet all partners, sign proper Data Processing Agreements (DPAs), and enforce compliance protocols across their data ecosystem.

Your data privacy chain is only as strong as its weakest link — and the Digital Personal Data Protection Act ensures there’s no passing the buck.

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How Sekel Tech Helps You Stay Compliant with the Digital Personal Data Protection Act (DPDP Act)

Sekel Tech has developed a comprehensive approach to data privacy and security, ensuring that businesses using its platforms remain compliant with India’s Digital Personal Data Protection Act (DPDP Act). Here’s how Sekel Tech supports your compliance journey:

1. Consent-Driven Data Collection and Processing

- Sekel Tech’s solutions are built around explicit consent mechanisms, allowing users to control how their personal data is collected, processed, and shared, which is a fundamental requirement of the DPDP Act.

- The platform provides transparent opt-out options, ensuring individuals can withdraw consent at any time, aligning with the DPDP’s emphasis on user rights.

2. Data Subject Rights Management

- Sekel Tech’s infrastructure incorporates tools for managing data subject requests, including access, correction, and erasure of personal data. This automation supports compliance with the DPDP Act’s requirements for honoring individual rights efficiently and at scale.

- The company programmatically processes data erasure requests, ensuring that user requests for deletion are honored promptly and in compliance with legal obligations.

3. Robust Security and Data Protection Measures

- Sekel Tech employs advanced security protocols such as data encryption, role-based access control (RBAC), two-factor authentication, and Web Application Firewalls (WAF) to safeguard personal data from unauthorized access or breaches.

- Regular compliance audits, vulnerability management, and continuous monitoring are integral to their security framework, ensuring ongoing adherence to data protection requirements.

4. Data Localization and Secure Infrastructure

- The platform’s hyperlocal data fabric ensures that Indian citizen data remains within local borders, supporting the DPDP Act’s data localization mandates while maintaining accessibility and performance.

- Data is securely backed up on cloud based infrastructure through partnerships with trusted vendors like AWS and Google Cloud, providing resilience and reliability.

5. Compliance Certifications and International Standards

- Sekel Tech holds globally recognized certifications, including SOC 2 Type I & II and ISO/IEC 27001:2022, and is GDPR compliant. These certifications reflect a mature, systematic approach to information security and privacy that aligns with the DPDP Act’s principles.

- Their GDPR-aligned practices provide a strong foundation for DPDP compliance, as both regulations emphasize consent, transparency, and user rights.

6. Privacy-First Platform Design and Partner Support

- Sekel Tech’s platform is designed to make compliance easy for brands and partners, many of whom may not have dedicated privacy resources. The company provides thorough documentation, responsive support, and privacy-by-design features to help partners meet their own compliance obligations.

- Transparent data processing practices and clear privacy policies ensure accountability and build trust with end-users.

7. Proactive Incident Response and Accountability

- The company maintains detailed activity logs and has proactive incident response protocols, ensuring that any data incidents are addressed swiftly and transparently, as required by the DPDP Act.

Key DPDP Compliance Features at Sekel Tech

Sekel Tech’s holistic, privacy-first approach ensures that your business can confidently meet the requirements of the DPDP Act, protecting both your customers’ data and your organization’s reputation.

“With Sekel Tech, you gain more than leads — you gain data peace of mind.
Protect your brand, secure your data, and ensure full compliance — all from one intelligent platform.”

Frequently Asked Questions (FAQs)

1. What is the Digital Personal Data Protection Act in India?

The Digital Personal Data Protection Act (DPDP Act), enacted in 2023, is India’s comprehensive data privacy law. It regulates how organizations collect, store, process, and share personal data of Indian citizens. The law aims to safeguard individual privacy while enabling responsible use of data by businesses.

2. What is the DPDP Act 2025 in India?

There is no separate DPDP Act 2025 — this typically refers to the expected full implementation of the Digital Personal Data Protection Act, 2023 by the year 2025. By then, all provisions, compliance requirements, and enforcement mechanisms are likely to be active and binding for businesses operating in India.

3. What is Rule 5 of the DPDP Rules?

Rule 5 under the DPDP draft rules generally pertains to notice and consent. It outlines how Data Fiduciaries must obtain clear, informed, and specific consent from Data Principals (individuals) before collecting or processing their personal data. It emphasizes transparency and user rights at the point of data collection.

4. What is the penalty for DPDP non-compliance?

The DPDP Act imposes strict financial penalties for violations, including:

- Up to ₹250 Crore for data breaches or failure to protect personal data.

- Fines for not obtaining proper consent, not reporting breaches, or violating user rights.

These penalties make it one of the strongest data privacy regulations in India.

5. What are the principles of the DPDP Act?

The Digital Personal Data Protection Act is based on key principles:

- Lawful and transparent processing

- Purpose limitation: data must be used only for what users consented to.

- Data minimization: collect only the data necessary.

- Storage limitation: retain data only for as long as needed.

- Accountability: the Data Fiduciary remains liable even if a third-party handles the data.

- User Rights: individuals have the right to access, correct, delete, and know how their data is used.

Conclusion

In today’s digital landscape, data privacy is inseparable from brand safety. Protecting customer data is not just a legal obligation under regulations like the Digital Personal Data Protection Act (DPDP Act)—it is a critical factor in building and maintaining trust with your audience. Brands that prioritize data privacy demonstrate responsibility, transparency, and respect for their customers, all of which are essential for long-term reputation and success.

By leveraging Sekel Tech’s platform, you gain access to robust privacy-first tools and automated compliance features that help safeguard personal data, honor user rights, and ensure full alignment with the DPDP Act. Sekel Tech’s secure infrastructure, consent-driven data practices, and proactive compliance support empower your business to not only meet regulatory requirements but also elevate your brand’s trustworthiness in the market.

Take advantage of Sekel Tech’s platform to make data privacy your brand’s strongest asset—and ensure your brand remains safe, compliant, and trusted in the digital era.

“Be proactive. Be accountable. Protect your customers — and your brand.”

📞 Book a demo today and take control of your data before it controls your risk.

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