Introduction
The Digital Personal Data Protection Act, 2023 (DPDP Act) marks a significant milestone in India’s data privacy landscape, establishing a comprehensive legal framework for the processing of digital personal data. At its core, the Act positions consent as the primary lawful basis for processing personal data, requiring organisations, referred to as data fiduciaries, to obtain valid consent from individuals, known as data principals, before collecting or using their information, except in clearly defined exceptional circumstances. This approach underscores the Act’s commitment to upholding individual autonomy and control over personal data.
Under Section 6 of the DPDP Act, valid consent must be free, specific, informed, unconditional, and unambiguous, demonstrated through a clear affirmative action by the data principal. This means that consent cannot be bundled, coerced, or implied through silence or pre-ticked boxes; instead, it must be a deliberate and explicit agreement to the processing of personal data for specified purposes. The Act’s definition of consent aligns closely with global standards, ensuring that individuals are fully aware of what they are consenting to and can exercise meaningful control over their personal information.
Key Consent Requirements Under the DPDP Act
Under the DPDP Act, consent forms the cornerstone of lawful data processing. Data fiduciaries must obtain consent before processing any personal data, with Section 6 stipulating that valid consent must be "free, specific, informed, unconditional, and unambiguous". This consent must be demonstrated through clear affirmative action by the data principal, showing their agreement to the processing activities. The DPDP Act also places significant emphasis on providing data principals with control over their information after consent is given. Data fiduciaries must implement easy mechanisms for withdrawing consent, ensuring that the process of withdrawal is comparable in simplicity to how consent was initially provided.
Complementing these provisions are comprehensive notice obligations that require data fiduciaries to inform data principals clearly about their data processing activities. These notices must detail the categories of personal data collected, the specific purposes of processing, the grievance redressal mechanism, and methods for exercising rights under the Act. The Draft Rules further specify that these notices must be presented independently of other information, in clear and plain language, and be available in English or any of the twenty-two languages specified in the Eighth Schedule to the Constitution of India. A key aspect of the consent under the DPDP Act is its focus on consent management.
Consent Manager
To enhance data privacy and individual control, the DPDP Act introduces the concept of a Consent Manager. This role acts as a bridge between individuals (Data Principals) and entities handling their data (Data Fiduciaries), enabling secure and transparent consent management in the digital space.
According to NITI Aayog's 2020 DEPA framework, Consent Managers empower users to share data securely with third parties through revocable, traceable, and granular consent mechanisms using standardized APIs—replacing outdated methods like notarization and screen scraping. These managers are officially registered with the Data Protection Board and must offer an interoperable platform for giving, managing, and withdrawing consent.
The concept originated from the 2017 Srikrishna Committee Report, which envisioned Consent Managers as trusted intermediaries offering users a clear interface to control their data-sharing preferences.
Eligibility to Act as a Consent Manager:
To operate as a Consent Manager under the DPDP Act, an entity must be registered with the Data Protection Board of India (DPBI). It must also demonstrate robust technical infrastructure capable of managing consent in a secure and transparent manner, while adhering to high standards of data security, including encryption protocols and routine compliance audits.
Is the Appointment of a Consent Manager Compulsory?
Organisations have flexibility in implementation. They may appoint external, third-party Consent Managers to provide independent consent governance, or they may manage the function internally, as long as all legal and technical requirements under the DPDP Act are fully met.
Link with the Account Aggregator Model:
The Consent Manager model mirrors the structure of the Account Aggregator (AA) framework in India’s financial sector. While AAs enable consent-driven sharing of financial data, Consent Managers are designed to ensure that personal or sensitive data—such as healthcare information—is accessed only with explicit, traceable consent.
Example: A hospital may use a Consent Manager to transmit diagnostic records to a consulting specialist, ensuring lawful and transparent data exchange.
Best Practices for Consent Management
Effective consent management is essential for building user trust and maintaining compliance with data protection laws. Organisations should adopt the following key practices:
Impact of Non-Compliance
Penalties for Breach Under the DPDP Act
DPDP Act imposes substantial financial consequences for violations, particularly in cases involving mishandling of personal data by Consent Managers. These penalties are designed to reinforce compliance and underscore the importance of safeguarding individual data rights.
Magnitude of Penalties
Under the Act, non-compliance can attract fines of up to ₹250 crore, depending on the gravity and nature of the breach. This high penalty threshold demonstrates the law’s commitment to enforcing strong data protection standards across all sectors.
Factors Influencing the Fine
Regulators consider multiple elements when determining penalties, such as the severity and duration of the breach, whether it was accidental or deliberate, the organisation’s response efforts, level of cooperation with authorities, and any history of prior offences.
Consequences for Organizations
In addition to the financial burden, non-compliant entities may suffer reputational harm that undermines customer trust and long-term viability. These risks highlight the necessity for sound data governance frameworks and proactive compliance with the DPDP Act.
Role of Data Fiduciaries and Significant Data Fiduciaries
Data Fiduciaries play a central role in managing personal data responsibly and lawfully. They are accountable for ensuring that consent for data processing is obtained through clear, legally compliant notices and that individuals are appropriately informed before their data is used. This requires developing a robust consent request mechanism, often involving structured formats such as consent artefacts, which standardise the presentation of information to users and ensure consistency across platforms. Automation may facilitate this process, particularly for large datasets, but certain contexts, such as unstructured or proprietary systems, might necessitate manual handling.
Equally important is the obligation to honour consent withdrawals swiftly and efficiently. Data Fiduciaries must ensure that consent can be revoked as easily as it was given and that such withdrawal halts all data processing activities within a reasonable time. They must also notify any associated processors to cease processing and erase relevant data. Additionally, they are required to maintain verifiable logs of consent for audit purposes and potential legal scrutiny. This includes tracking and synchronising consent statuses across systems, ensuring real-time compliance with user requests for correction, update, or deletion of their data. Through these responsibilities, Data Fiduciaries act as both guardians and enablers of individual data rights in the digital ecosystem.
Comparison with Global Standards
The consent management framework under India’s DPDP Act aligns closely with international best practices, particularly those established by the European Union’s General Data Protection Regulation (GDPR). Both laws emphasise the importance of obtaining explicit, informed, and freely given consent before processing personal data. Like the GDPR, the DPDP Act requires consent to be specific and unambiguous, ensuring individuals have clear control over how their data is used. Additionally, both frameworks mandate easy mechanisms for individuals to withdraw consent at any time, reinforcing user autonomy and control.
However, while the GDPR has set a global benchmark with its detailed guidelines and extensive enforcement experience, the DPDP Act reflects an evolving approach tailored to India’s unique legal and technological landscape. It incorporates similar principles such as granular consent options, transparency through clear notices, and robust record-keeping, but also emphasises localised requirements like multilingual notices and culturally relevant communication. This convergence demonstrates India’s commitment to harmonising its data protection regime with global standards while addressing domestic needs, thereby fostering trust and facilitating cross-border data flows in an increasingly interconnected digital economy.
Conclusion
In conclusion, the DPDP Act, 2023, signifies a transformative shift in India’s approach to data governance, placing individual consent at the heart of personal data processing. Through its emphasis on clarity, transparency, and user empowerment, the Act seeks to build a rights-based data protection framework that aligns with international norms while reflecting India’s specific regulatory and socio-technical context. The introduction of Consent Managers, robust notice and withdrawal mechanisms, and clearly defined roles for Data Fiduciaries underscores a systemic approach to safeguarding user autonomy in the digital domain.
As data becomes central to innovation and service delivery, the DPDP Act establishes essential guardrails to ensure trust, accountability, and lawful data use. Organisations must now treat data privacy as a core compliance function, not merely a technical formality. By adopting best practices in consent management, investing in interoperable systems, and staying attuned to evolving regulatory expectations, entities can not only avoid severe penalties but also foster long-term credibility with users. Ultimately, the DPDP Act lays the foundation for a more transparent, secure, and responsible digital ecosystem in India.
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