​​​

 

Think Before You Collect: India’s Data Law Explained

 

With the rapid growth of India’s digital economy, data protection has become a key compliance priority for startups. The Digital Personal Data Protection Act, 2023 (DPDP Act) is now in force, introducing significant obligations for businesses that collect and process personal data. Startups must obtain clear and informed consent from users before collecting their personal data, and users have the right to withdraw that consent at any time. The law also grants individuals the right to request access to, correction of, or deletion of their personal information. If your startup processes large volumes of data, you may be required to appoint a Data Protection Officer (DPO) to oversee compliance efforts. Non-compliance can attract steep penalties, making it vital to integrate privacy considerations early in your business operations.

​

Cross-border data transfers are permitted under the new law, but only to countries and entities approved by the Indian government. This means that if your startup relies on global cloud platforms or shares user data with foreign partners, you must ensure those arrangements meet the required legal standards. Additionally, the law obliges startups to implement reasonable security safeguards, such as encryption, access controls, and breach response protocols. These measures are not only legal requirements but also essential to maintaining user trust.

​

Your website or app must also feature a privacy policy written in clear, accessible language. It should detail what data you collect, why you collect it, how it’s used, and whether it’s shared with third parties. It should also provide users with information on their rights and how to file complaints. While some compliance leeway may be extended to early-stage startups, this is expected to be temporary. As your startup scales or seeks investment, data protection practices will likely come under scrutiny.

Taking a proactive approach to data compliance—through audits, policy updates, and employee training—not only reduces legal risk but also signals maturity and trustworthiness to users, partners, and investors.