Draft DPDP Rules 2025: A Roadmap for Businesses to Balance Privacy Rights with Operational Efficiency

As technology advances and AI seeps into every aspect of our lives, a large amount of data is being generated into the public domain. According to insights from KPMG's Global Tech Report 2024, 35 percent of respondents have said they are focused on improving the protection of their data in the next 12 months. Today, data capabilities have moved from being a differentiator to an expectation, within the modern enterprise. At a time when safeguarding this endless stream of data has become crucial more than ever before, India’s Ministry of Electronics and IT (MeITY) has released the draft DPDP Rules 2025, serving as a critical extension to the Digital Personal Data Protection (DPDP) Act, 2023.

Even as data capabilities continue to mature, unlocking more value from tech requires repositioning them as a core competency for the organisation, backed by strong security, privacy ethics and governance. To this effect, the DPDP Rules 2025 offer operational clarity and outline compliance measures for businesses that handle personal data. Rising digital interactions means only one thing for companies. The regulations enumerated under the Act, will help to assess the risks of digitalisation, while helping to enhance customer trust and brand credibility.

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When India witnessed the 5.3 million leaked accounts in 2023, placing it 5^th in the list of most breached countries in the world, it shed a light on the risks associated with digitalisation. As a result, the rule of mandatory reporting data breaches to the Data Protection Board (DPB) will help to ensure swift response, enabling timely risk mitigation and protection of data principles.

Simultaneously, it will also help promote accountability and transparency, compelling organisations to adopt stronger security measures to prevent future breaches. Clearly identifying legitimate grounds for processing or obtaining consent-based processing can strengthen compliance and mitigate privacy risks. Furthermore, implementing clear privacy notices and verifiable consent mechanisms could benefit organisations by fostering transparency and legal compliance, reducing the risk of regulatory penalties.

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Three steps can help businesses assess and algin well with the draft rules. Companies operating in retail, e-commerce, and banking domain, that deal with large volumes of user-generated data must make it a point to run regular data privacy risk assessments. This is a practice that will help them to identify gaps and ensure compliance with evolving data protection regulations. Besides reviewing existing data processing, retention, and breach  notification policies, they will have to establish principles of Privacy by Design for adequate data security and protection.

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Following robust data governance mechanisms is the second most crucial step. Companies will have to develop and maintain transparent and easily comprehensible privacy notices to manage customer data. Data consent management practices, which makes customers understand how their financial and transactional data is being processed, should also be followed in industries such as e-commerce and fintech. Building a privacy-first culture is also pertinent for social media platforms and any form of online services that deal with an end-user. Transparency on how their personal data, preferences, and behavioural analytics are used, enhances customer control and confidence. While mechanisms are good to have, training employees on data protection leading practices and regulatory requirements will be equally important to sustain data handling practices in the long run.

Thirdly, organisations should establish a compliance monitoring framework by conducting regular audits and Data Protection Impact Assessments (DPIAs). In a situation where a digital banking platform comes under a ransomware attack, effective resilience mechanisms with comprehensive incident response plans can be extremely useful. Swift restoration will help to prevent data loss and avoid financial disruptions. At the same time, irrespective of the extent of the breach, it should be reported to the Data Protection Board (DPB), along with timely and transparent communication to affected Data Principals.

With a well-defined incident response plan in place, customer-facing financial institutions can not only detect, but also contain and mitigate any such threats. It will also ensure that they comply with the DPDP Act, RBI cybersecurity guidelines, cyber security and resilience guidelines from SEBI and global data protection frameworks. Proactivity towards data protection and complying with cross-border data transfer regulations will help companies to safeguard themselves against digital-led operational disruptions, while reinforcing trust among its customers.

The implementation of a structured data privacy regime in India, calls upon businesses to  proactively adopt compliance measures under the DPDP framework. These draft rules not only reinforce the importance of responsible data processing but also provide a roadmap for fostering trust, transparency, and consumer confidence. These have been planned with a goal to transform compliance standards across industries by mandating stronger data governance and security. Ultimately, the DPDP Rules 2025 will help lay the foundation for a private-centric ecosystem, balancing business innovation with strong personal data protection.

The author is the Partner, Digital Trust and Head of Cyber Strategy and Governance, KPMG in India.