Steps to Comply with India’s Digital Personal Data Protection Act (DPDPA)

India’s Digital Personal Data Protection Act (DPDPA) 2023 marks a historic step in the country’s privacy landscape, offering a comprehensive legal framework for the protection of personal data. Designed to safeguard individuals’ privacy rights while ensuring accountability for organizations that process personal data, the DPDPA introduces stringent penalties, including fines of up to ₹250 crores for non-compliance. In this blog, we will outline the 10 critical steps organizations must take to comply with the DPDPA, minimize risks, and build trust with data principals.

Step 1: Understand Applicability and Scope

The first step to compliance is understanding the scope of the DPDPA. The Act applies to:

• Personal Data Processed within India: This includes data collected digitally or later digitized.
• Data Processed Outside India: If the data processing is linked to offering goods or services in India, or monitoring the behavior of individuals within the country.

Exemptions:

• Personal/Domestic Use: Data used solely for personal or domestic purposes does not fall under the Act’s provisions.
• Publicly Available Data: Data that is made publicly available or processed for purposes related to national interest, scientific, historical, or research purposes is exempt.

Organizations must conduct a jurisdictional assessment to determine whether their data processing activities fall under the Act, including any cross-border data processing activities.

Step 2: Build a Comprehensive Data Inventory

While the DPDPA does not mandate a specific data inventory, creating one is a best practice for compliance. A data inventory helps organizations understand and manage the data they collect and process. This step involves:

• Identifying Personal Data: Mapping out the types of personal data being processed (e.g., demographic, financial, health).
• Data Mapping: Understanding where data is stored, shared, and processed (both internally and with third parties).
• Processing Activities: Identifying the purpose for processing, the legal basis for processing, and the retention periods.

Implementation Tips:

• Begin with interviews and questionnaires to gather initial information.
• Gradually implement automated tools like data classification software for scalability and efficiency.

A well-maintained data inventory helps organizations gain a clearer understanding of their data flow and aids in responding to data subject requests and regulatory inquiries.

Step 3: Implement Robust Consent Mechanisms

Consent is a cornerstone of the DPDPA. Under the Act, consent must meet several criteria:

• Freely Given: Data principals must have the freedom to give or withdraw consent without any form of coercion.
• Informed and Specific: Data principals must be fully informed about the data processing activities, including the purpose and scope.
• Revocable: Consent must be easily withdrawn at any time.

Action Plan:

• Design Clear Consent Notices: Consent forms should be simple, clear, and easy for data principals to understand.
• Track and Store Consent: Implement systems that record the consent process, including timestamps, data principal identifiers, and the version of consent provided.
• Allow Easy Withdrawal: Ensure that data principals can revoke consent as easily as they give it.

By implementing robust consent mechanisms, organizations not only comply with legal requirements but also build trust with their customers.

Step 4: Enable Data Principal Rights

The DPDPA empowers data principals (individuals whose data is being processed) with specific rights. These include:

• Access: The right to know what personal data is being processed and for what purpose.
• Correction and Erasure: Data principals can request the correction or deletion of inaccurate or outdated data.
• Nomination: In case of incapacity or death, a nominated person can exercise the rights of the data principal.
• Grievance Redressal: Data principals must have access to grievance redressal mechanisms in case of data-related disputes.

Action Plan:

• Develop Workflows: Create processes for handling requests for access, correction, or erasure.
• Automate the Process: Implement technologies that allow easy access to personal data, streamline correction requests, and ensure timely erasure of data.

Organizations should establish clear communication channels and set up dedicated teams or systems to handle data subject requests effectively.

Step 5: Identify and Manage Significant Data Fiduciary Obligations

The DPDPA empowers the government to designate certain entities as Significant Data Fiduciaries (SDFs) based on criteria such as the type of data processed, the volume of data, and the potential risks to data principals. SDFs face additional obligations, including:

• Appointing a Data Protection Officer (DPO): SDFs must appoint a Data Protection Officer who is based in India.
• Periodic Audits: Conduct regular audits through independent auditors to assess compliance.
• Governance and Accountability: Adopt stricter governance measures and ensure accountability for personal data protection.

Action Plan:

• Assess whether your organization could be designated as an SDF.
• Begin preparing for these additional obligations by appointing a DPO and conducting regular data protection audits.

Being proactive in understanding and managing these obligations can help prevent legal challenges and minimize compliance risks.

Step 6: Adopt Technical and Organizational Safeguards

The DPDPA requires organizations to adopt both technical and organizational safeguards to protect personal data. These measures include:

• Access Controls: Limit data access to authorized personnel based on roles and responsibilities.
• Data Encryption: Use encryption and pseudonymization to secure sensitive data both in transit and at rest.
• Incident Response: Have systems in place for breach detection and notification.

Best Practices:

• Privacy by Design: Integrate privacy and data protection measures into the design of systems and processes.
• Regular Audits: Perform regular security and privacy audits to identify vulnerabilities and address them.

By implementing these safeguards, organizations not only comply with the DPDPA but also protect themselves from security breaches that could damage their reputation.

Step 7: Prepare for Breach Notification

The DPDPA requires prompt notification of data breaches to:

• Affected data principals.
• The Data Protection Board of India.

While specific rules are awaited, organizations should preemptively:

• Create an incident response plan.
• Test notification processes through simulations.

Step 8: Train and Educate Employees

Employees handling personal data must be aware of their responsibilities under the DPDPA. Key steps include:

• Rolling out privacy and security training programs.
• Publishing internal policies outlining data handling procedures.
• Integrating compliance awareness into onboarding and periodic training.

Step 9: Review Contracts with Third Parties

Organizations often rely on third-party data processors, who also fall under the DPDPA’s purview. Ensure:

• Contracts include clear obligations for data protection.
• Vendors and suppliers adhere to required safeguards.
• Regular audits of third-party compliance.

Step 10: Monitor Regulatory Updates

The DPDPA framework includes additional rules and standards that are yet to be announced. To stay ahead:

• Monitor updates from the government and the Data Protection Board.
• Participate in industry forums to share insights and best practices.
• Update compliance measures as new regulations are introduced.

Conclusion

Compliance with the DPDPA is not just a legal necessity but a strategic investment in trust and transparency. By taking a proactive approach, businesses can not only mitigate risks but also demonstrate their commitment to protecting personal data. Start with a thorough assessment of applicability, build robust data governance frameworks, and prioritize technical safeguards to ensure compliance and foster long-term growth in the data-driven economy.