DPDP Act Compliance: What Changes Before the Consent Manager Deadline

Introduction

India's Digital Personal Data Protection (DPDP) Act, 2023 marks a significant shift in how businesses collect, process, and protect personal data. As the regulatory framework continues to evolve, organizations must prepare for new compliance obligations, including provisions relating to Consent Managers. While several operational aspects of the DPDP Act, including the detailed framework relating to Consent Managers, are expected to be implemented through subordinate legislation and notifications, businesses should begin aligning their data governance practices with the Act's core principles. These entities are expected to play an important role in enabling individuals to manage, review, and withdraw their consent for the processing of personal data through a transparent and accessible mechanism.

For businesses handling customer, employee, or vendor information, DPDP Act Compliance is no longer just a legal requirement—it is becoming a crucial part of responsible data governance and customer trust. Organizations that proactively assess their data practices and align them with the Act will be better positioned to adapt to future regulatory developments.

This article explains the role of Consent Managers, the key compliance changes businesses should prepare for, and practical steps to strengthen DPDP Act compliance before the relevant provisions come into effect.

Table of Contents

• Understanding DPDP Act Compliance

• What is a Consent Manager?

• Key Changes Businesses Should Prepare For

• How Businesses Can Strengthen DPDP Act Compliance

• Common Compliance Mistakes

• DPDP Compliance Checklist

• Key Takeaways

• FAQs

• Conclusion

Understanding DPDP Act Compliance

The Digital Personal Data Protection Act, 2023 establishes a legal framework governing the processing of digital personal data in India. It aims to balance an individual's right to protect personal data with the legitimate need of businesses to process such data for lawful purposes.

Under the Digital Personal Data Protection Act, 2023, an entity that determines the purpose and means of processing personal data is referred to as a “Data Fiduciary”, while the individual to whom the personal data relates is the “Data Principal”. Understanding these roles is fundamental to determining an organization’s compliance obligations.

Under the Act, organizations processing personal data are expected to:

• Process personal data lawfully and transparently.

• Obtain valid consent where required.

• Process data only for specified purposes.

• Maintain appropriate security safeguards.

• Respond to requests from individuals regarding their personal data.

• Delete personal data when it is no longer required, subject to applicable legal obligations.

Where the Act permits processing on the basis of specified legitimate uses or other applicable grounds, organizations should ensure that such processing strictly satisfies the statutory conditions.

Compliance is not a one-time exercise but an ongoing process requiring regular review of internal data protection practices.

What is a Consent Manager?

A Consent Manager is an entity that enables individuals (Data Principals) to give, manage, review, and withdraw consent through an accessible, transparent, and interoperable platform. Consent Managers are intended to operate as independent entities registered in accordance with the applicable legal framework and are expected to act as neutral intermediaries rather than representatives of any particular business.

Instead of interacting separately with multiple organizations, individuals may use a Consent Manager to exercise greater control over how their personal data is processed.

For businesses, this means ensuring that their systems can appropriately recognize, record, and act upon consent-related requests in accordance with applicable legal requirements.

Key Changes Businesses Should Prepare For

1. Stronger Consent Management

Organizations should review existing consent mechanisms to ensure that consent requests are:

• Clear and specific

• Easy to understand

• Freely given

• Capable of being withdrawn as easily as they are provided

Pre-ticked boxes or vague consent language may not align with the principles of the DPDP framework.

2. Better Record-Keeping

Businesses should maintain accurate records of:

• When consent was obtained

• What purpose consent covered

• Any subsequent withdrawal or modification of consent

Proper documentation can support accountability and demonstrate compliance.

3. Transparent Privacy Notices

Privacy notices should clearly explain:

• What personal data is collected

• Why it is collected

• How it will be used

• How individuals can withdraw consent

• Available grievance redressal mechanisms

Simple, user-friendly language improves transparency and trust.

4. Improved Internal Data Governance

Organizations should evaluate:

• Data collection practices

• Data storage systems

• Access controls

• Data retention policies

• Vendor management processes

A structured governance framework helps reduce compliance risks.

Significant Data Fiduciaries (SDFs)

Certain organizations may be notified as Significant Data Fiduciaries based on factors such as the volume and sensitivity of personal data processed, risks to individuals, and other criteria prescribed by the Government. Such entities may be subject to additional compliance obligations, including enhanced governance measures, appointment of key compliance personnel, periodic assessments, and other requirements as may be prescribed.

Example Scenario

Consider an online retail company collecting customer information for order processing and promotional emails. If a customer later withdraws consent for marketing communications through an approved Consent Manager, the business should have processes in place to promptly update its systems and discontinue such communications while continuing to process personal data for purposes that remain legally permissible under the DPDP Act, such as fulfilment of contractual obligations, compliance with applicable laws, or other lawful grounds recognised under the DPDP Act.

This illustrates why businesses should establish clear consent management procedures before regulatory requirements become fully operational.

DPDP Act Compliance Checklist

• Review existing privacy policies.

• Update consent collection methods.

• Conduct a data inventory and data mapping exercise. 

• Identify legal basis for each processing activity. 

• Maintain records of consent.

• Map personal data processing activities.

• Review vendor and third-party agreements.

• Train employees on data protection obligations.

• Implement appropriate technical and organizational security measures.

• Establish procedures to respond to data principal requests.

• Periodically review compliance processes.

Enforcement and Penalties

The DPDP Act empowers the Data Protection Board of India to examine instances of non-compliance and impose monetary penalties where applicable. The quantum of penalty depends upon the nature of the contravention and other factors prescribed under the Act. Beyond regulatory action, inadequate data protection practices may also expose organizations to reputational harm, contractual disputes, and loss of customer confidence.

Common Compliance Mistakes

Many organizations face compliance challenges due to avoidable mistakes, including:

• Relying on outdated privacy policies.

• Collecting more personal data than necessary.

• Using unclear or bundled consent requests.

• Failing to maintain proper consent records.

• Delaying responses to consent withdrawal requests.

• Overlooking third-party data processing arrangements.

• Treating compliance as a one-time exercise instead of an ongoing responsibility.

• Assuming that implementation of a consent management tool alone is sufficient to achieve compliance without reviewing underlying governance processes.

Identifying and addressing these issues early can help businesses build a stronger compliance framework.

DPDP Act Compliance: Quick Comparison

Traditional Data Practices	DPDP Act Compliance Approach
Generic consent forms	Clear, purpose-specific consent
Limited transparency	Detailed privacy notices
Manual consent tracking	Structured consent management
Inconsistent data governance	Documented compliance processes
Reactive privacy measures	Proactive compliance and accountability

Key Takeaways

• The DPDP Act introduces a structured framework for digital personal data protection in India.

• Consent Managers are expected to facilitate transparent consent management for individuals.

• Businesses should review consent mechanisms, privacy notices, and internal governance processes.

• Maintaining proper documentation and accountability is essential for long-term compliance.

• Early preparation can help organizations adapt more effectively as the regulatory framework evolves.

Frequently Asked Questions

1. What is DPDP Act Compliance?

DPDP Act Compliance refers to meeting the legal obligations under the Digital Personal Data Protection Act, 2023, for collecting, processing, storing, and protecting digital personal data in India.

2. Who needs to comply with the DPDP Act?

Any organization processing digital personal data within the scope of the Act may be required to comply with its applicable provisions.

3. What is the role of a Consent Manager?

A Consent Manager enables individuals to provide, review, manage, and withdraw consent for processing their personal data through a transparent platform.

4. Why is consent important under the DPDP Act?

Consent forms one of the lawful bases for processing personal data under the Act and should be free, informed, specific, and capable of being withdrawn.

5. What should businesses review before the Consent Manager framework becomes operational?

Businesses should review privacy notices, consent mechanisms, data processing practices, internal governance frameworks, and record-keeping processes.

6. Does DPDP Act Compliance only apply to large companies?

No. Compliance obligations may apply to organizations of different sizes depending on their data processing activities and the provisions applicable to them.

7. Will organizations need to change their existing contracts with vendors?

Organizations should review agreements with third-party service providers to ensure they adequately address data processing responsibilities, confidentiality, security measures, and compliance with the DPDP Act, wherever applicable.

Conclusion

As India's data protection landscape continues to evolve, businesses should take proactive steps to strengthen their DPDP Act Compliance programs. Reviewing consent practices, improving transparency, maintaining proper records, and implementing effective data governance measures can help organizations build greater accountability and customer trust. Organizations that begin preparing early by reviewing data processing activities, strengthening governance frameworks, updating contractual arrangements, and implementing robust consent management practices are likely to be better positioned for evolving regulatory expectations and reduced compliance risk.

Preparing in advance not only supports regulatory readiness but also demonstrates a commitment to responsible handling of personal data in an increasingly digital business environment.

© Anhad Law 

Disclaimer: The contents of the above publication are based on interpretation, analysis and understanding of applicable laws and updates in law, within the knowledge of the authors. Readers should take steps to ascertain the current developments, given the everyday changes that may be occurring in India and internationally on the subject covered hereinabove. This is not a legal opinion, analysis, or interpretation. This is an initiative to share developments in the world of law, or as may be relevant for a reader. No reader should act on the basis of any statement made above without seeking professional and upto-date legal advice.